Japan OKs budget for FY 2023 with record high defense spending

TOKYO, Dec. 23 (Xinhua) -- The Japanese government adopted a record draft budget of 114.38 trillion yen (865 billion U.S. dollars) for fiscal year 2023 (April 2023-March 2024) on Friday, with defense spending hitting a record high and social security costs on a rise.

The figure approved by the cabinet marked a rise of 6.3 percent from the initial budget for the current year. The draft budget will be submitted to the ordinary Diet session next year.

Breaking down the outlays, social security costs made up around one-third of the total, highlighting the challenges posed by Japan's rapidly graying population, one of the key factors dragging on the country's economy.

The defense budget amounted to 6.82 trillion yen (51.4 billion U.S. dollars), a 26.3-percent jump over the current budget of 5.4 trillion yen (40.7 billion U.S. dollars) when defense outlays were limited to around 1 percent of the country's gross domestic product.

Japanese Prime Minister Fumio Kishida has pledged to raise national defense spending to a total of 43 trillion yen (324.2 billion U.S. dollars) over the next five years, bringing the annual budget to 2 percent of gross domestic product in fiscal 2027.

To finance the substantial increase in defense spending, the government has decided to hike taxes, cut spending in other areas and tap surplus funds instead of issuing new bonds, triggering a strong backlash from the public, Kyodo News reported Friday.

With debt more than twice the size of its economy, Japan's fiscal health is the worst among major developed nations, the report said.