Japan FY 2027 Budget Requests Likely to Top 143 T. Yen

Tokyo, Aug. 31 (Jiji Press)–General-account budget requests from Japanese government agencies and ministries for fiscal 2027 are expected to exceed 143 trillion yen, hitting a record high for the fourth consecutive year. The figure will be much higher than the 122,445.4 billion yen sought under the government’s fiscal 2026 general-account budget. On Monday, the Finance Ministry finished accepting budget requests for the fiscal year starting in April 2027. The anticipated increase in the total requested amount reflects the government’s decision to include funds for measures that have been earmarked under supplementary budgets in the initial budget and create a new investment quota with no caps set on the amounts to be sought. The new quota will be for investments in the crisis management and growth fields to create a strong and prosperous Japan. Also, ministries and agencies were allowed to make fund requests without setting specific amounts for certain measures. Fund requests for the new investment quota topped 10 trillion yen, the level assumed by the government in its estimates. The industry ministry made the largest request of 4,525 billion yen. Debt-servicing costs will likely balloon due to an increase in coupon payments reflecting rising interest rates. As a result, the overall budget request for fiscal 2027 is expected to go up by over 2 pct from 140,612.6 billion yen, the combined amount of the fiscal 2026 initial budget and the fiscal 2025 supplementary budget. The health ministry made a record budget request totaling 36,580.3 billion yen. While the size of the Defense Ministry’s latest budget request is almost the same as that for the previous year, many of its requests did not show specific amounts as the government is set to update the country’s three major national security documents later this year. The Finance Ministry plans to secure a record 36,638.6 billion yen to cover debt-servicing costs in fiscal 2027, up by 5,362.8 billion yen from fiscal 2026. The growth reflects a hike in the assumed long-term interest rate to 3.8 pct from 3.0 pct. Voicing plans to strictly scrutinize the submitted requests, Finance Minister Satsuki Katayama said at a press conference Tuesday last week that the requested funds “should naturally contribute to growth or induce private investments.” “We hope to build a strong economy and realize fiscal sustainability at the same time in an integrated way under our responsible and proactive fiscal policy,” she said. END [Copyright The Jiji Press, Ltd.]