Approved on Dec. 27, the budget for the fiscal year 2025 (starting April), surpasses the previous record of 112.57 trillion yen set in fiscal 2024.
Here’s a breakdown of key highlights:
- Social Security Spending: Approximately 38.3 trillion yen (about 33% of the budget) has been allocated to address the needs of Japan’s aging population. This measure includes lowering official drug prices and revisiting the high-cost medical expense benefit system to curb rising costs.
- Defense Spending: Around 8.5 trillion yen (about 7.4% of the budget) has been allocated to bolster Japan’s defense capabilities, reflecting a growing emphasis on national security.
- Regional Development: Tax grants aimed at revitalizing outlying regions will be doubled to 200 billion yen, signaling the government’s commitment to balanced regional growth.
- Bond Issuance: For the first time in 17 years, the issuance of new government bonds will be kept under 30 trillion yen, with a forecast of 28.649 trillion yen. Despite these efforts, government debt will still account for roughly a quarter of total spending.
This record budget highlights Japan’s balancing act of addressing its growing social and defense needs while managing its fiscal health.
As a note, even for travelers to Japan, the emphasis on regional developments could mean improved infrastructure and regional vitality, ensuring an even more enriching experience across the nation.
But with the growing aging population, it does spark some questions about the years to come. Will Japan’s economy be able to keep up with the growing social security spending?
