Tokyo, Dec 21 (efe-epa).- The Government of Japan approved on Monday its draft budget for fiscal year 2021, in which it marked a record high for the ninth consecutive year and 41 percent of which will be financed by public debt.
The budget for the financial year beginning on Apr. 1, 2021 was officially reported to be 106.6 trillion yen ($1.03 trillion), which is 3.8 percent more than the budget that was approved for the current fiscal year.
The draft budget will need be passed by the Diet (Parliament) in its January session, and it will mark the first budget under current Prime Minister Yoshihide Suga who on Sep. 16 replaced Shinzo Abe after the latter stepped down for health reasons.
According to the draft, 53.9 percent of the expenditure for the next fiscal year will be borne by taxes, 40.9 will be covered by public debt and the rest from non-tax revenues.
To finance the budget, new bond issuances will soar 11.04 trillion yen from the current year’s initial plan to 43.60 trillion yen, the first year-on-year rise in 11 years on an initial basis.
Japan has the highest public debt with respect to their gross domestic product (GDP) – which this year crossed 230 percent – among industrialized countries.
The draft of the initial general-account budget, which will be submitted to an ordinary Diet session in January, includes 23.76 trillion yen in debt-servicing costs.
Among the policy spending, five trillion yen will be set aside for reserve funds for future response to the global health crisis, which can be spent without a breakdown of expenditures and further Diet approval.
The Cabinet approval of the draft annual budget comes while Japan records an increasing number of coronavirus cases, seriously ill patients and daily deaths since mid-November, even as there were signs the world’s third-largest economy was slowly emerging from the initial impact of the pandemic.
Suga has followed his predecessor Abe’s policy, which was popularly called “Abenomics”, of placing priority on economic growth through public spending to achieve fiscal consolidation. EFE-EPA