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Japan may need to consider compiling another extra budget if needed- senior LDP lawmaker

TOKYO, Oct 9 (Reuters) - Japan may need to consider compiling another extra budget to help its economy if the current reserve fund is not enough to respond to the coronavirus pandemic, a senior ruling party lawmaker said on Friday.

Hakubun Shimomura, the policy research council chief for the Liberal Democratic Party (LDP), said the reserve would likely be enough to cover support for the economy in 2020. A third extra budget could come as early as next year if reserve funds become insufficient.

“If 10 trillion yen of budget reserve is not enough, the government may need to compile a third extra budget,” Shimomura said in an interview with Reuters.

He also said the Prime Minister Yoshihide Suga was unlikely to call a snap election this year.

Japan’s economy suffered its biggest slump on record in the second quarter due to the fallout of the coronavirus. The government has delivered two stimulus packages this year totalling 234 trillion yen ($2.21 trillion), or about 40% of Japan’s gross domestic product, to soften the blow.

The government is tapping a pool of funds, set aside under the packages, to meet the cost of battling the pandemic. But some lawmakers are calling for another spending package as the economic pain persists.

$1 = 105.9700 yen Reporting by Kaori Kaneko and Izumi Nakagawa; Editing by Ana Nicolaci da Costa

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