Japan’s initial budget for fiscal 2022 starting in April is expected to surpass ¥107 trillion ($950 billion), marking a record high for the 10th straight year, mainly due to growing social security and national defense costs, government sources said Tuesday.
As it did when compiling the initial budget for the current fiscal year 2021 that totaled ¥106.61 trillion, the government plans to set aside ¥5 trillion for reserve funds to continue to fight the COVID-19 pandemic, according to the sources.
The amount of new bond issuance to finance the budget could possibly top the current fiscal year’s initial plan of ¥43.60 trillion. If realized, it would further worsen Japan’s fiscal health, the worst among major developed countries with public debt exceeding ¥1,200 trillion as of March this year.
Prime Minister Fumio Kishida’s Cabinet aims to approve the draft general-account budget in late December, and have it passed by March in an ordinary parliamentary session to be convened in January, the sources said.
Tax revenue in the next fiscal year is estimated to total more than ¥60 trillion, larger than the ¥57.45 trillion in fiscal 2021, reflecting a rebound in corporate earnings, especially those of manufacturers, from the adverse impact of the pandemic, according to the sources.
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