Record debt in Japan's proposed budget

Raleigh Times Tuesday 23rd December, 2003

Japan's cabinet Wednesday approved a budget which features cuts in major policy programs but requires the issuance of a record amount of debt.

The proposed budget would be 82.1 trillion yen ($657 billion) for fiscal year 2004. The record debt is blamed on swelling social security and debt-servicing costs, the Kyodo News Service said.

To help pay for the budget, the government will issue 36.5 trillion yen ($292 billion) fresh government bonds, a record high for an initial budget.

The government is scheduled to submit the draft budget for approval to an ordinary session of the Diet, Japan's parliament, convening in January.

The mounting debt puts Japan's primary deficit at around 19.0 trillion yen ($152 billion) in fiscal 2004, still far from the government's goal of achieving a primary surplus in the early 2010s.

But the figure is still an improvement from the primary deficit of about 19.6 trillion yen for fiscal 2003, and marked the first improvement in four years, Finance Ministry officials said.