Overview
- Cabinet approval is expected on Friday for the first budget compiled under Prime Minister Sanae Takaichi, following a ¥21.3 trillion stimulus in November.
- The draft sets new bond issuance at about ¥29.6 trillion and shifts the debt mix by cutting 20-, 30- and 40-year sales to roughly ¥17 trillion, a 17-year low, while holding 10-year, 2-year and 5-year issuance steady.
- Planned outlays include roughly ¥39 trillion for social security, about ¥8.8 trillion for defense programs and around ¥31 trillion for debt-servicing as higher assumed rates lift interest costs.
- Tax revenue is projected at roughly ¥83.7–84 trillion, a record that still falls short of total spending needs.
- Government growth forecasts were raised to 1.1% for fiscal 2025 and 1.3% for fiscal 2026 on expectations of firmer consumption and capital expenditure.