Japan's parliament on Monday began deliberations on a 13.20 trillion yen ($88 billion) extra budget for fiscal 2023 to next March, as the government moves to fund an economy-supporting package that aims to alleviate the burden of rising prices on households.

The additional spending will bring the total expenditure for the year to a whopping 127.58 trillion yen, of which a third will be secured by issuing government debt.

Debt issuance for the supplementary budget alone is 8.88 trillion yen.

Prime Minister Fumio Kishida wants to have the supplementary budget approved by parliament by the end of this month. Work to draft an initial budget for fiscal 2024 will intensify in December.

The government says it is committed to restoring Japan's fiscal health, the worst among major developed nations, by reducing spending but it has made clear it is currently prioritizing actions it believes will promote economic growth.

Part of the extra budget will be used to provide 70,000 yen to low-income households that are exempt from paying tax.

The increased funding is necessary to extend subsidies on fuel until next spring and give tax incentives to small and mid-sized companies that raise wages. Inflation in Japan remains high due to surging energy costs that are driven up by the weak yen.

The government is also seeking to boost the competitiveness of the economy over the longer term by nurturing the domestic chip sector and focusing on artificial intelligence, space and ocean exploration, among other sectors.

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