Reuters International

Japan's Prime Minister Shinzo Abe attends a news conference at his official residence in Tokyo, Japan, March 29, 2016. REUTERS/Yuya Shino

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TOKYO (Reuters) - Japan's Prime Minister Shinzo Abe ordered his government on Sunday to compile an extra budget package to fund reconstruction from recent earthquakes that hit the south of the country, with an aim to put it into effect by June 1.

The move comes as Abe faces increasing pressure to inject more economic stimulus to reignite growth in a stagnant economy ahead of a Group of Seven (G7) summit his government will host in late May in Ise-Shima in central Japan.

Abe told a meeting of his disaster-response committee that the government needs to compile a supplementary budget with an intention to bring it into effect during this session of parliament, which ends on June 1.

"We need to move fast and take more flexible measures," Abe said after visiting the quake-hit areas in southern Japan the previous day.

The earthquakes on the island of Kyushu killed about 50 people and damaged at least 5,000 houses, forcing about 80,000 people out of their homes as of Friday.

"The size of a supplementary budget has not been fixed as aftershocks are still continuing," Finance Minister Taro Aso told reporters after the meeting.

Ruling Liberal Democratic Party Secretary General Sadakazu Tanigaki also told reporters the cabinet approval of the budget plan will likely come after the Golden Week holiday that ends early May, and that he hopes to have it approved by the Diet before the G7 meeting starts on May 26.

Senior ruling party officials told Reuters on Saturday that Japan is considering compiling a supplementary budget in this parliament session to help reconstruction in the quake-hit south.

Typically, the government takes up a supplementary budget at an extraordinary session later in the year but the earthquakes prompted quick action on a separate budget, they said.

The disaster-related spending will be on top of a fiscal stimulus plan of up to 10 trillion yen ($89.46 billion) that Abe is expected to announce around the time he hosts the G7 summit.

The government has already set aside 2.3 billion yen from a 350 billion yen reserve fund for the 2016/17 April-March fiscal year for the disaster-hit region. In addition, it will offer 42.1 billion yen in regional tax subsidies.

With weak consumption and wage growth limp clouding Japan's growth, economists are betting Abe would delay an expected hike in sales tax to 10 percent from 8 percent.

(Reporting by Takashi Umekawa; Writing by William Mallard and Yuka Obayashi; Editing by Robert Birsel and Christopher Cushing)

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