Japan plans to announce a record annual budget this week as Prime Minister Fumio Kishida spends more on next summer’s elections and increases the world’s heaviest debt burden.
According to a report from the Nikkei newspaper yesterday, the budget for the year starting in April will increase to 107.6 trillion yen ($ 934 billion). This is an increase of about 0.9% from the original spending plan last year, but final spending usually grows with additional budgets over the years.
According to the report, tax revenues will reach a record high of 65.2 trillion yen and the issuance of new corporate bonds is expected to be limited to 36.9 trillion yen. The initial budget for this year required the issuance of 43.6 trillion yen.
Expected tax revenue surges show that government efforts to support households and businesses during a pandemic have reduced the amount of economic scars, but bond issuance has more than one-third of Japan’s need for money. It indicates that you have to borrow the payment of that annual expenditure.
Yuichi Kodama, Chief Economist at the Meiji Yasuda Life Research Institute, said, “This is a record budget, but at this stage, I think the Ministry of Finance was able to keep spending relatively low.” “The problem is that the Japanese system allows us to inflate spending with extra budget that is not so scrutinized.”
The annual budget will fund some of Fumio Kishida’s recent stimulus, spending more than $ 690 billion. It aims to enhance recovery from Covid facing the challenges of new Omicron variants.
Despite the widespread use of its variants in the United States and Europe, Japan has so far been able to avoid large outbreaks. While 73% of new cases reported in the United States were identified as Omicron last week, Japan has registered less than 70 Omicron cases as of last weekend.
Combined spending also aims to lay the foundation for what the Prime Minister calls income, a new form of capitalism that distributes income more evenly and takes a longer-term perspective.
Kishida will face another important election in the summer and may decide whether to continue as prime minister or join the long-term cast of Japan’s one-year leader. His success in dealing with Omicron and revitalizing the economy could be an important factor in ensuring that the ruling coalition maintains control of both Houses of Parliament.
http://www.gulf-times.com/story/706712/Japan-plans-record-annual-budget-for-election-year Japan plans record annual budget for election year