The Japanese government will compile a record 115.5 trillion yen ($734 billion) initial budget for fiscal 2025 due to rising defense and social security spending, as well as increasing debt-servicing costs.
The draft budget, set to begin in April, will exceed the previous record of 114.38 trillion yen for fiscal 2023. Tax revenues are projected to hit a record 78.4 trillion yen for the sixth consecutive year. Despite the increase, the government plans to issue 28.6 trillion yen in new bonds, adding further strain to its fiscal health.
Social security costs, driven by the aging population, are expected to rise to 38.3 trillion yen, while defense spending will increase to around 8.5 trillion yen. Prime Minister Shigeru Ishiba stated that the Cabinet will approve the draft on Friday before submitting it to parliament.
Following a loss of majority in the House of Representatives in October’s election, the ruling coalition may need to revise the draft in response to opposition party demands.
