Islam News – Japan’s initial budget for fiscal 2021 will total about ¥106.61 trillion ($1.03 trillion), a record high for the ninth straight year, as it plans to add ¥5 trillion to reserve funds for the future response to the coronavirus pandemic, government sources said Thursday.
Topping ¥100 trillion for the third year in a row, the budget for the year starting in April will far exceed fiscal 2020’s initial budget of ¥102.66 trillion.
To finance the new budget, the government plans to issue new bonds worth around ¥43.60 trillion, up ¥11.04 trillion from the current year’s initial plan, marking the first year-on-year rise in 11 years on an initial basis, the sources said.
The budget has been drafted on the assumption that tax revenues will be about ¥57.45 trillion, down ¥6.07 trillion from the previous year, according to the sources.
The government recently revised down its revenue estimate in fiscal 2020 to ¥55.13 trillion, given the impact of the pandemic on corporate earnings.
Social security costs, accounting for about a third of Japan’s initial budget in recent years, will grow about ¥150 billion from fiscal 2020 due to the country’s fast-aging population, but at a slower pace than the government’s earlier estimate of an increase of a few hundred billion yen, according to the sources.
Regardless, the figures could fuel concern about Japan’s fiscal consolidation. The country’s public debt exceeded ¥1,100 trillion, or well over 200 per cent of gross domestic product, as of the end of fiscal 2019, the worst among major developed countries.
Prime Minister Yoshihide Suga’s Cabinet is expected to approve the draft budget on Monday.