Reference News, December 26 report: According to Kyodo News, on December 26, the Japanese Cabinet approved a record preliminary budget draft of 12.231 trillion yen (about 78.5 billion U.S. dollars) for the 2026 fiscal year. Prime Minister Asahi Hayato is promoting an expansionary fiscal policy to support the economy, while increasing defense spending and accelerating military construction.
The report said that due to rising prices pushing up personnel and other fixed costs, as well as an aging population increasing welfare expenditures, the general budget plan has set a new historical high for the second consecutive year, exceeding the preliminary budget for the 2025 fiscal year (11.52 trillion yen).
According to this next fiscal year's budget draft, which will start in April of next year, the government plans to issue 2.958 trillion yen in new bonds to cover the revenue gap - nearly a quarter of total revenue, highlighting Japan's severe reliance on debt and intensifying concerns about further deterioration of Japan's fiscal health. Japan is one of the major economies with the worst fiscal conditions.
This is the first full-year spending plan since Asahi took office in October, and it is expected to be passed in the Diet before the end of this fiscal year.
The report said that Asahi's aggressive spending policy has placed significant downward pressure on the yen relative to major currencies in the foreign exchange market, which poses potential risks for a country heavily reliant on imported energy.
Additionally, defense-related budget spending reached a record 9.04 trillion yen, and the emergency contingency fund budget was 1 trillion yen. (Translated by Guo Jun)
Original: toutiao.com/article/7588032293852201514/
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