Japan

FY2018 budget to total record high Y97.7 tril

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The central government draft budget for fiscal 2018 is expected to total 97.7 trillion yen, a record high for the sixth straight year, due in large part to swelling social security and defense spending, government sources said Saturday.

Moderate economic expansion is expected to boost tax revenue to around 59.1 trillion yen, up around 1.4 trillion yen from fiscal 2017 ending in March, the sources said.

The cabinet is expected to approve next Friday the draft general-account budget, which compares with 97.45 trillion yen in the initial budget for the current fiscal year.

For fiscal 2018 beginning in April, government bond issuance will be cut by around 700 billion yen to around 33.7 trillion yen, down for the eighth straight year on an initial budget basis to the lowest level since fiscal 2009.

With its fiscal health the worst among advanced countries, Japan is trying to reduce government bond issuance. But the government still relies heavily on government debt to finance its policy projects.

General expenditures, excluding debt servicing and tax revenue allocation to local governments, will likely total around 58.9 trillion yen, the sources said, up some 500 billion yen due partly to the aging of Japan's population and more spending to counter North Korea's missile threat.

The budget will earmark around 33 trillion yen for social security outlays and around 5.2 trillion yen in defense spending.

© KYODO

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