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- October 17, 202612°
- BIST10011,722-2.89%
- USD49.45+0.05%
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- INTEREST37.00%-1.00
- BITCOIN81,579+0.09%
- October 17, 202612°
Japan’s ministries seek a record 143 trillion yen for the fiscal 2027 budget
Japan’s ministries have raised their total funding request for the fiscal 2027 budget to 143 trillion yen, setting a record for the fourth consecutive year. Of the request, 12 trillion yen is earmarked for a special investment category with no upper limit, which is intended to support growth and private investment.
Japan’s ministries have raised their total funding request for the fiscal 2027 budget to 143 trillion yen. Budget requests have thus reached a record level for the fourth consecutive year.
Of the total, 12 trillion yen has been allocated to a special investment category for which no upper limit was set in advance. The government created the category to support a “responsible and proactive” fiscal policy.
Spending to be moved into the initial budget
The Japanese government plans to include in the initial budget some expenditures that have long been covered by supplementary budgets. Finance Minister Satsuki Katayama said they would prepare a budget that would support economic growth while ensuring fiscal sustainability.
Katayama said the budget process would include a detailed examination of each initiative’s contribution to growth and its capacity to encourage private investment. The minister said they aimed for a comprehensive budget transformation that would strengthen Japan’s growth potential.
Chief Cabinet Secretary Minoru Kihara noted that the increase was not particularly large when the fiscal 2025 supplementary budget and the fiscal 2026 initial budget were considered together. Kihara also said the government had not ruled out preparing a supplementary budget.
Rate hikes raise debt-servicing burden
Japan has one of the weakest fiscal positions among the major advanced economies. After interest rates remained low for an extended period, their increase is raising the cost of financing public debt.
Debt-servicing costs in the fiscal 2027 budget were calculated at 36.64 trillion yen. The interest-rate assumption used in the calculation was raised to 3.8 percent from 3 percent in the fiscal 2026 budget.
The fiscal 2026 initial budget stood at 122.3 trillion yen. The Ministry of Health, Labour and Welfare submitted the largest budget request, seeking 36.58 trillion yen amid the impact of the aging population.
The Ministry of Defense also requested 8.84 trillion yen, including funds planned for the development of attack drones. Many ministries submitted line-item requests without specifying amounts. These requests could push the total budget demand even higher.
The government is expected to complete its budget draft by the end of the year. After the draft is submitted to parliament next year, the budget is scheduled to be approved by the end of March.
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