Members of the Japan Ground Self-Defense Force (JGSDF) disembark from a V-22 Osprey aircraft during a live fire exercise at East Fuji Maneuver Area in Gotemba on May 28, 2022. (TOMOHIRO OHSUMI / POOL / AFP)
TOKYO – Japan unveiled on Friday a record 114.4 trillion yen ($863 billion) budget for the next fiscal year from April, pushed up by increased military spending and higher social security costs for a fast-ageing population.
The budget – endorsed by Prime Minister Fumio Kishida's cabinet on Friday along with a bond issuance plan – features record military and welfare spending for a country saddled with an ageing population.
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The budget got a boost from Kishida's controversial plan to double Japan' defense spending to 2 percent of GDP by 2027
To fund defense spending for military facilities, warships and other vessels, the government decided to use construction bonds worth 434.3 billion yen, to be issued in fiscal 2023, in an unprecedented move.
The budget got a boost from Kishida's controversial plan to double Japan' defense spending to 2 percent of GDP by 2027, straining Japan's already tattered finances under the weight of public debt at 2.5 times the size of its economy.
In a brighter sign for the economy, the budget draft expected Japan to rake in a record tax revenue worth 69.44 trillion yen, reflecting improving corporate profits and 69.44 trillion yen to lower new bond issuance to 35.62 trillion yen.
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The budget assumed next fiscal year's exchange rate at 137 yen to the dollar, the weakest since 2010, in calculating fiscal 2023 budget spending for defense and diplomacy, the officials said.