Prime Minister Takaichi Proposes Record 130 Trillion Yen Budget

Prime Minister Sanae Takaichi is initiating Japan's budget process for the next fiscal year with a strategy centered on large-scale investment to spur economic growth. Ministry allocation requests are expected to reach a record ¥130 trillion, as Takaichi intends to establish a multi-year account for her growth strategy and incorporate spending typically reserved for supplementary budgets into the initial plan.

To finance this expansion, Takaichi stated in a Yomiuri interview that she aims to keep new bond issuance below ¥40 trillion. She noted that the government would not hesitate to spend on policies designed to spur domestic investment.

This fiscal approach faces significant constraints due to Japan's government debt, which is approximately twice the size of its economy. While tax revenues are projected to rise, a planned consumption tax cut on food is expected to reduce receipts by roughly ¥5 trillion. These factors contribute to a potential funding gap of nearly ¥40 trillion if total spending exceeds the ¥130 trillion mark.