Japan Sets ¥112 Trillion Budget for FY24

Yomiuri Shimbun file photo
Prime Minister’s Office

The government on Friday set the fiscal budget for 2024 to ¥112.07 trillion.

The draft figure represents a ¥2.31 trillion drop from fiscal 2023’s ¥114.38 trillion, marking the nation’s first fiscal reduction in 12 years.

Nevertheless, the budget remains substantial, exceeding ¥110 trillion for the second consecutive year. The government will likely continue to rely heavily on government bonds to manage its finances.

In terms of expenditure, social security spending, which accounts for one-third of total outlay, increased due to the nation’s graying society. This uptick is set to be offset by a substantial reduction in reserve funds, previously used for addressing high prices, among other purposes.

Local allocation tax subsidies to municipal governments totaled around ¥17.7 trillion. Meanwhile, government bond expenditures that cover repayments and interest on government bonds, rose to a record high of around ¥27 trillion.

Among various revenues, tax revenue is expected to remain at about ¥69.6 trillion — similar to fiscal 2023 — due partly to the impact of the government’s fixed-amount income tax cut.

In light of the fact that nontax revenues cannot finance the budget, the government intends to issue about ¥34.9 trillion in new government bonds.