Japan’s Budget to Top 100 Trillion Yen Again, Document Shows

(Bloomberg) -- Japan’s budget next fiscal year will top 100 trillion yen ($914 billion) for a second straight year, highlighting the struggle to curb government spending in a country with the developed world’s biggest public debt.

Expenditures will rise about 1.2% to 102.7 trillion yen, with social security costs of 35.9 trillion yen pushing up the total, a budget draft seen by Bloomberg shows.

Almost a third of the spending will be paid for by issuing more debt, although the amount of bonds issued will drop for a seventh straight year, according to a person familiar with the matter.

Prime Minister Shinzo Abe is trying to narrow the deficit and rein in a public debt that now exceeds 200% of gross domestic product, but rising costs for health care and pensions in this rapidly aging society make that hard. The government in October hiked the sales tax in order to bring in more money.

The details of the budget are as follows:

• General spending of 61.7 trillion yen.
• Debt servicing costs of 23.4 trillion yen.
• Payments to regional and local governments will be 15.8 trillion yen.
• Forecast tax revenue of 63.5 trillion yen.
• Revenue from bond issuance at 32.6 trillion yen.
• The bond dependency ratio, which shows how much of total income is from selling bonds, will drop to 31.7% from 32.2% last year.
• Other revenue of 6.6 trillion yen.

The initial budget may not give a full picture of all the spending that will happen next year because the government regularly drafts extra budgets that push up the numbers.

A finance ministry official said he couldn’t comment on any plan that has yet to be released.

To contact the reporters on this story: Yuko Takeo in Tokyo at ytakeo2@bloomberg.net;Emi Urabe in Tokyo at eurabe@bloomberg.net

To contact the editors responsible for this story: Paul Jackson at pjackson53@bloomberg.net, Jason Clenfield

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