TOKYO: General-account budget requests for fiscal 2025 submitted by Japanese government ministries and agencies by Friday’s deadline are expected to total around 117 trillion yen, hitting a record high for the second consecutive year.

The expected total exceeds the current record of 114,385.2 billion yen, requested for fiscal 2024.

The increase reflects the rising cost of paying interest on Japanese government bonds, or JGBs, as well as a surge in defense spending in light of the increased security threats in East Asia.

The requests seek many funds for measures to tackle inflation, promote wage increases, deal with the country’s declining birthrate and boost defense capabilities.

“We will strictly examine (the budget requests) to avoid loosening fiscal discipline and prevent a one-sided budget increase,” Finance Minister Shunichi Suzuki told a press conference Friday.

Based on the requests, the government will draft a fiscal 2025 budget by the end of the year.

Among the ministries and agencies, the Health, Labor and Welfare Ministry’s request was the largest, totaling a record 34,276.3 billion yen and accounting for about 30 percent of the total requests. Funds sought to cover social security costs increased in line with the aging of society.

The Children and Families Agency, launched last year to spearhead unprecedented measures against the declining birthrate, asked for 4,218.9 billion yen.

The Finance Ministry’s request includes 28,911.6 billion yen for debt-servicing costs, or JGB interest payments and principal repayments, surpassing the previous year’s record high of about 27 trillion yen. The ministry raised its assumed JGB interest rate to 2.1 percent following the Bank of Japan’s rate hikes.

The Defense Ministry also submitted a record budget request, totaling 8,538.9 billion yen, based on the government’s plan to spend about 43 trillion yen on defense over the five years through fiscal 2027.

JIJI Press