TOKYO: General-account budget requests submitted by Japanese government ministries and agencies for fiscal 2025 totaled 117,605.9 billion yen, up from 114,385.2 billion yen sought for fiscal 2024 and hitting a record high for the second straight year, the Finance Ministry said Wednesday.

The amount requested for the year starting next April topped 110 trillion yen for the fourth consecutive year, due to higher costs for defense, social security and interest payments on government securities as the country faces pressing issues, including growing geopolitical risks, its aging population and rising interest rates.

The Liberal Democratic Party-led ruling coalition may push the government to spend more after the party elects on Sept. 27 a new leader who is almost certain to become prime minister. The new LDP leader may opt to dissolve the House of Representatives for a general election.

At the same time, there are persistent calls for the government to strictly assess the requests when it drafts its fiscal 2025 budget later this year.

The requests include 4,158.5 billion yen under a special spending quota for key policies. Meanwhile, the total amount does not reflect requests without specified amounts, such as those for measures to tackle inflation and promote wage increases.

The Finance Ministry sought 28,911.6 billion yen for debt-servicing expenses, up nearly 2 trillion yen from a record 27,009 billion yen in the fiscal 2024 budget, after the Bank of Japan ended its negative interest rate policy and began raising interest rates.

The ministry raised its assumed rate for interest payments on government debt to 2.1 percent, leading to an increase of 12.8 percent in interest payment expenses.

The Defense Ministry’s request jumped 7.4 percent to a record 8,504.5 billion yen, amid the increasingly harsh security environment surrounding the country. The increase also reflected higher procurement costs for defense equipment due to inflation and the yen’s weakness.

The Health, Labor and Welfare Ministry, whose request was the largest among government ministries and agencies, sought a record 34,276.3 billion yen, as social security costs, including pension and medical expenses, which account for about 30 percent of the government’s annual budget, continue to rise.

The education ministry requested 5,953 billion yen, including funds to improve teachers’ benefits, while the Children and Families Agency sought 4,218.9 billion yen.

Requests related to the fiscal investment and loan program came to 12,723.7 billion yen, down 4.6 percent from fiscal 2024.

JIJI Press