MONEY MASTER

Key Takeaway: Japan is preparing a ¥13.5 trillion (US$87 billion) extra budget aimed at supporting low-income households and managing rising costs , according to the Sankei newspaper. The Japanese government is set to implement a supplementary budget of about ¥13.5 trillion to fund a new stimulus package. This includes direct aid to low-income households , providing ¥30,000 to those exempt from residential taxes and ¥20,000 per child for families. The plan also proposes restarting subsidies for electricity and gas from January to counter high fuel prices. Prime Minister Shigeru Ishiba is expected to finalise the package by Nov 22 . This budget reflects Japan’s commitment to shielding vulnerable populations from economic pressures amid global price increases.

Finance Minister II Datuk Seri Amir Hamzah Azizan stated that the top 15% (T15) income group , who will be excluded from the targeted RON95 petrol subsidy, will be determined by more than just the Household Income Survey . This approach will ensure that those in genuine need, including the middle class , are not left out amid rising living costs. Speaking in the Dewan Rakyat , Amir mentioned that the Ministry of Finance is considering a tiered pricing mechanism for RON95 subsidies, similar to the models for diesel and electricity subsidies. The potential use of MyKad and e-wallets as mechanisms for subsidy delivery is also under review. Amir highlighted the success of the targeted diesel subsidy , which saved RM600 million monthly by reducing retail diesel sales by 25% and increasing commercial sales by nearly 50%.

The Organisation for Economic Cooperation and Development (OECD) expects global growth to stabilize at 3.2% in both 2024 and 2025, as the impact of central bank rate hikes diminishes and declining inflation supports household incomes . In its latest forecast, the OECD slightly raised its 2024 outlook from 3.1% while keeping 2025 growth unchanged. The OECD highlighted that as inflation continues to fall and interest rate cuts are introduced, consumer spending is likely to benefit, boosting economic activity. If recent declines in oil prices persist, global headline inflation could be 0.5 percentage points lower over the coming year. The US Federal Reserve's interest rate is expected to decrease to 3.5% by the end of 2025, and the European Central Bank could lower rates to 2.25% by then. The US economy is projected to slow from 2.6% growth in 2024 to 1.6% in 2025, while China's growth is expected to decelerate from 4.9% to 4.5% over the same period, due to weak...