TOKYO (Reuters) – Japan’s ministries have asked for a record $997 billion in initial budget for the next fiscal year, the finance ministry said, as Prime Minister Yoshihide Suga’s new government juggles the need to rein in the pandemic and revive the economy.
The general account spending requests for the fiscal year that begins next April totalled 105.4071 trillion yen ($996.85 billion), exceeding the previous high of 105 trillion sought for the current year.
The amount got a boost from demand related to urgent steps to contain the virus spread and ease the pain from the economic fallout, which triggered the deepest recession on record.
“We remain committed to achieving both economic revival and fiscal reform, and we’ll overcome the coronavirus crisis to pass the future on to the next generation,” Wataru Ito, state minister of finance, told reporters on Wednesday.
The first budget under Suga underscored a struggle for the heavily indebted government to curb snowballing debt that tops twice the size of Japan’s $5 trillion economy.
Many submitted requests did not specify the amount of spending, leaving room to swell the overall figure as the finance ministry reviews the requests and finalises the amount of spending in late December.
Highlighting the bulging costs of supporting an ageing population and financing debt, budget requests for social security and debt servicing came to 32.9 trillion yen and 25.5 trillion yen respectively, or more than half the overall budget.
Virus uncertainty kept the finance ministry from setting a ceiling on overall budget requests, making it tough to curb spending.
Two extra stimulus budgets compiled for this fiscal year to tackle the virus will boost overall government spending to about 160 trillion yen, or 1.6 times the initial budget.
(Reporting by Tetsushi Kajimoto; Editing by Clarence Fernandez)