JAPAN’S Cabinet approved its first extra budget for this fiscal year Friday with spending worth US$315 billion to cushion the blow from the COVID-19 pandemic, as the country keeps its stimulus taps open even as other economies close theirs.

Featuring cash payouts to households with children, financial support for corporations and tourism discounts, the extra budget contains some elements of populist spending despite the image of Prime Minister Fumio Kishida as a fiscal hawk.

Kishida is prioritizing economic growth over fiscal reform near-term to encourage citizens to share the fruits of growth under a wealth distribution policy dubbed “new capitalism.” He remains under pressure to top up spending in the run-up to upper house elections next summer.

“Japan is in the midst of a coronavirus crisis and the stimulus package has been compiled based on our stance of mobilizing necessary fiscal spending without hesitation,” Finance Minister Shunichi Suzuki told reporters after a Cabinet meeting.

“It’s true that will cause underlying fiscal conditions to become even more severe. We must continue efforts on fiscal reform.”

The extra 36 trillion yen (US$315.68 billion) in spending will be financed by additional government bonds worth 22 trillion yen, straining the industrial world’s heaviest debt burden.

Kishida’s government will next month compile an annual state budget for fiscal 2022/23.

(SD-Agencies)