TOKYO: Japan’s government ministries have made budget requests totalling US$784 billion for the next fiscal year – their second-largest total to date, driven largely by the defense ministry’s request for a rise in spending to record levels.
The combined total spending requests made for next year’s budget came to ¥110 trillion, the finance ministry said on Monday (Sep 5) not far off requests for this financial year that came in at ¥111.7 trillion (US$795 billion).
This fiscal year’s initial budget has ended up being trimmed to ¥107 trillion, still a record amount.
The budget may be inflated further as some items were requested without an amount being specified in areas such as defense and decarbonisation.
“Spending pressure appears to be strong. Large-scale spending looks set to continue for a while given investment in defense and decarbonisation,” said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute.
“The government has no choice but to sell more bonds for the time being, which must be repaid by sales tax hikes in future.”