Japan’s budget for next fiscal year will rise to a record above $930 billion, boosted by public works and military spending, government sources familiar with the process said on Monday.
The government is in final negotiations on the general-account budget for the year from April, which will exceed 96 trillion yen ($931 billion), the sources told Reuters on condition of anonymity.
The draft budget, to be approved by Prime Minister Shinzo Abe’s Cabinet on December 24, will be up from this fiscal year’s initial budget of 92.6 trillion yen.
Abe, elected a year ago Monday, has used heavy government spending as one of his main tools in a bid to end 15 years of deflation and sluggish growth for the world’s third-biggest economy. But with public debt of more than twice the size of the economy, Abe also aims to balance the budget over time, starting with a sales-tax increase next April.
With an economic rebound and a tax increase, tax revenues next fiscal year are tipped to clear 50 trillion yen, a seven-year high, while bond issuance will decrease from this year’s 42.85 trillion yen, the sources said.
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