To help the economy cope with the impact of COVID-19, Japan's parliament authorised the first additional budget of the fiscal year 2021 on Monday, with a record spending of $317 billion, further straining the industrial world's highest debt burdens.

The 36 trillion yen ($317 billion) budget includes expenditures for combating COVID-19, including vaccines and drugs, as well as cash payouts for families with children and tourism promotion subsidies.

It is the largest supplementary budget the government has ever passed. In the previous fiscal year, Japan's government issued three additional budgets. The increased budget would be partially funded by additional government bonds worth 22 trillion yen to be issued in the current fiscal year.

Japan's parliament ends coronavirus-dominated session without extension |  The Japan Times

Prime Minister Fumio Kishida stated his first supplementary budget was intended for repairing the COVID-affected economy and generating a virtuous cycle of growth and wealth distribution, as well as repairing the country's public finances in the long term.

The budget also aims to promote tourism, secure corporate finance, increase green and digital transformation growth, and strengthen semiconductor factories and supply chains.

The additional budget will also be used to fund the government's record 79 trillion yen economic stimulus package, which was unveiled last month. The government claims that the package, which includes a record 55.7 trillion yen in expenditure, will increase GDP by 5.6%, a figure that private-sector economists believe is too optimistic.

The additional budget will be followed by an annual budget for the coming fiscal year, which will be finalised later this week and include 16 months of spending.