TOKYO

The Japanese government plans to issue about 25.45 trillion yen in deficit-financing bonds under the fiscal 2020 draft budget, Jiji Press learned Wednesday.

The general-account budget for the year from April is seen totaling around 102,660 billion yen, a record high and up some 1.2 trillion yen from the fiscal 2019 initial budget of 101,457.1 billion yen, informed sources said.

The anticipated budget growth is due to larger social security and defense outlays.

In the draft budget, social security expenditures, the largest spending item, will rise about 1.73 trillion yen from the fiscal 2019 initial budget to around 35.86 trillion yen, reflecting a rise in spending on medical services against the backdrop of the graying of society.

Social security spending will also be pushed up by the policy of free-of-charge preschool education, introduced alongside the consumption tax hike from 8 pct to 10 pct in October.

The draft budget will set aside 1.78 trillion yen to finance a reward point program for cashless purchases as "an extraordinary and special measure" to prevent an economic slump after the consumption tax increase, according to the sources.

On the revenue side, the issuance amount of new government bonds, excluding refunding bonds, is expected at around 32.56 trillion yen, down for the 10th year in a row. The sum will include 7.11 trillion yen in construction bonds.

Tax revenues are expected to expand to some 63.51 trillion yen. With this amount and new government bond issuance together falling short of spending needs, the government also plans to use nontax revenues of about 6.59 trillion yen, the sources said.

In fiscal 2019, the government revised its tax revenue estimate from an initial 62,495 billion yen to 60,180 billion yen.

Jiji Press