Another draft budget is ready to beat the world record. After long discussion Japan’s Parliament approved the largest budget ever that totals ¥95.8 trillion (or $939.2 billion) for fiscal year 2014. The draft, which is a part of Prime Minister Shinzo Abe’s economic reforms, was supported by the majority. The authorities are apprehensive about population aging and bends over backwards to deal with it as it multiples costs for pensions. According to the draft, Japan is planning to spend ¥30.5 trillion (or $300 billion) on social security next fiscal year.
Besides, the national science and education spending will rise to ¥5.44 trillion (or $53.3 billion), while defense will get ¥4.88 trillion (or 48 billion). The overall budget inched up ¥3.3 trillion (or $32.35) compared to the last year. At first glance, the difference seems rather small, but it is enough for the Land of the Rising Sun to be on top of the world.
The government revenues including bonds sales, which were curbed to ¥41.25 trillion (or $404.4 billion), will pay for this FY budget. So, bonds issuance is ¥1.6 trillion less than the amount set the year before.
Thus, the Cabinet is all set to welcome in the new financial year which will start on April 1. However, the record budget led to a record debt. Japan’s debt burden went beyond 1 quadrillion yen ($10.3 trillion) coming in at 200% of GDP. That is rather impressive, but the Land of the Rising Sun is only the runner-up. The absolute world champion in terms of public debt is Zimbabwe. It should be noted that the Bank of Japan is the only purchaser of the government obligations.
