Japan Plans Record Spending

Japan’s government plans an initial budget of a record 97.7 trillion yen ($872 billion) for the 2018/19 fiscal year, while keeping new debt issuance below this year’s level thanks to hefty tax revenue as the economy picks up, government sources told Reuters. The planned budget spending for the year beginning April 1 marks an increase from this year’s 97.5 trillion yen, the sources said on condition of anonymity as the plan has not yet been finalized. Prime Minister Shinzo Abe’s cabinet is expected to approve the budget draft on Dec. 22, along with an extra budget for the current year. The budget underscores the difficulty Japan has in curbing spending—despite the heaviest debt burden in the industrial world—as an ageing population pushes up welfare costs, and regional tensions related to North Korea mean rising military spending. It all means a test of Abe’s will to restore fiscal health and revive the world’s third-largest economy at the same time, while he is seen favoring growth over austerity.