The Japanese government adopted a record draft budget of 114.38 trillion yen (865 billion US dollars) for the fiscal year 2023 (April 2023-March 2024) on Friday, with defence spending hitting a record high and social security costs on a rise.
The figure approved by the cabinet marked a rise of 6.3 per cent from the initial budget for the current year. The draft budget will be submitted to the ordinary Diet session next year.
Breaking down the outlays, social security costs made up around one-third of the total, highlighting the challenges posed by Japan's rapidly graying population, one of the key factors dragging on the country's economy, reports Xinhua.
The defence budget amounted to 6.82 trillion yen (51.4 billion US dollars), a 26.3-per cent jump over the current budget of 5.4 trillion yen (40.7 billion US dollars) when defence outlays were limited to around 1.0 per cent of the country's gross domestic product.
Japanese Prime Minister Fumio Kishida has pledged to raise national defence spending to a total of 43 trillion yen (324.2 billion US dollars) over the next five years, bringing the annual budget to 2.0 per cent of gross domestic product in fiscal 2027.
To finance the substantial increase in defence spending, the government has decided to hike taxes, cut spending in other areas and tap surplus funds instead of issuing new bonds, triggering a strong backlash from the public, Kyodo News reported Friday.
With debt more than twice the size of its economy, Japan's fiscal health is the worst among major developed nations, the report said.
