Japan Readies $800b Budget, Will Trim Debts
World Economy

Japan Readies $800b Budget, Will Trim Debts

Japan’s government will propose a record budget for next fiscal year of more than $800 billion but cut borrowing for a third year, government officials said on Sunday, as Prime Minister Shinzo Abe seeks to maintain growth while curbing the heaviest debt burden in the industrial world.
The third annual budget since Abe swept to power in late 2012 also highlights his struggle to contain bulging welfare costs for the fast-ageing society while increasing discretionary spending in areas such as the military.
Abe’s 96.3 trillion yen ($813 billion) draft budget for the year from April, to be approved by the Cabinet on Wednesday and submitted to an upcoming session of Parliament, is up from this fiscal year’s initial 95.9 trillion, the two officials told Reuters.
But spending restraint and a surge in tax revenues as the economy recovers allows the government to cut bond issuance by 4.4 trillion yen to 36.9 trillion, the third decrease in a row and the lowest level in six years, the officials said.
The improved fiscal picture helps Abe trim Japan’s public debt, which is well over twice the country’s GDP after years of sluggish growth and huge stimulus spending. The budget for the coming year follows an extra budget of 3.1 trillion yen for this fiscal year, approved last week.
With the budget deficit – excluding new bond sales and debt servicing – projected at roughly 3 percent of gross domestic product for the 2015-16 fiscal year, Abe will meet the government’s promise of halving the debt ratio from 2010-11 levels. But Finance Ministry calculations show that the goal of balancing the budget by 2020-21 remains ambitious.

 Tax Revenues
Abe raised the national sales tax in April to 8 percent from 5 percent, sending the world’s third-biggest economy into recession. He postponed a second increase, to 10 percent, by 18 months to April 2017, but the economy’s upturn under the premier’s easy-money policies is set to boost tax revenues in the coming year.
The draft budget projects tax revenues rising 4.5 trillion yen to 54.5 trillion yen, the officials said, easing somewhat the need to issue more bonds.
Debt will finance about 38 percent of the coming year’s budget, down from this year’s 43 percent.

Short URL : http://goo.gl/d27Dv0

You can also read ...

Saudi Arabia Bleeds as Capital Flight Continues
As Saudi Arabia raises the stakes in its dispute with Canada...
 Final Nail in Abraaj Coffin
The Abraaj Group has been put through the ringer in past...
Experts Say China Economy Manageable
Recent external pressures, a general global trade malaise...
Qatar Pledges $15b Investment :      Turkish Lira Weakens 6% on Threat of More US Sanctions
Turkey’s battered lira weakened more than 6% against the...
Europe Should Resist Illegal US Penalties
European countries should take effective steps to counter US...
Indonesia Sets Moderate Growth Goals
Amid rising external pressures, Indonesia’s economy is...
Australia Drought Could Cost $12 Billion
The Reserve Bank of Australia and a new report have warned of...
 Crypto Scams on the Rise in UK
Crypto currency scams are using images of celebrities and...