Japanese Finance Minister Shunichi Suzuki vowed on Monday to guide economic and fiscal policy in a "responsible" manner, as he urged lawmakers to enact a second extra budget with spending of $207 billion, backed mostly by new debt issuance.

Prime Minister Fumio Kishida's cabinet has compiled the spending plan worth 29 trillion yen ($207.37 billion), backed by new debt of about 23 trillion yen, to ride out risks from the global economy and price hikes caused by a weak currency.

Consumer inflation in the world's third largest economy hit a 40-year high in October, driven by food and energy prices, dealing a blow to consumers.

"The environment surrounding Japan's economy remains severe," Suzuki told parliament's lower house as it began a debate on the measure.

"There's also a concern about global recession," he said. "We must overcome this crisis."

Japan's economy suffered its first contraction in a year in the quarter from July to September as hefty imports curbed external demand and high living costs hurt consumers.

Elsewhere, the United States may slow its aggressive interest rate hikes in coming months as inflation could peak out and as investors brace for a downturn.

In China, a stringent 'zero-COVID' policy of tough lockdowns has led to disruption of supply chains, aggravating slowdown.

While Japan's extra budget further strained the industrial world's worst debt load, at more than twice the size of the economy, Suzuki vowed to do his utmost to revive growth.

The latest expenditure plan brings this fiscal year's total budgeted spending to more than 139.2 trillion yen.

Several rounds of heavy fiscal stimulus to tackle COVID-19 in Japan have pushed government spending to 1.4 times its initial estimates in each of the past three years.

As a result, outstanding government debt topped 1,250 trillion yen in June. ($1=139.8500 yen) (Reporting by Tetsushi Kajimoto; Editing by Clarence Fernandez)