Overview
- The cabinet signed off on a ¥122.3 trillion (about $785 billion) spending plan for the fiscal year starting in April, a 6.3% increase from the current year.
- New bond issuance is set at roughly ¥29.6 trillion as the share of spending funded by debt falls to 24.2%, the lowest since 1998.
- Tax revenue is projected to rise 7.6% to a record ¥83.7 trillion, helping finance expanded outlays without a larger jump in borrowing.
- Debt‑service costs are expected to climb 10.8% to ¥31.3 trillion, reflecting the Finance Ministry’s temporary interest‑rate assumption of 3%, the highest since 1997.
- The budget follows a ¥21.3 trillion stimulus announced in November and builds on higher growth forecasts of 1.1% for the current fiscal year and 1.3% for FY2026, even as social‑security spending nears ¥39.1 trillion and defense needs increase.