Gov't Backs JPY112trn Budget For FY24

The Japanese gov't has trimmed the budget for FY2024, the first annual decrease in 12 years. PM Fumio Kishida's cabinet approved the JPY112.07trn (USD787bn) budget package earlier today. The total is the second-highest in Japan's history, but comes in lower than FY2023's budget due to a decrease in COVID-related emergency funding.

• The package includes a significant increase in defence spending, with Kyodo News reporting, "Defense spending totaled a record 7.95 trillion yen for fiscal 2024, the second year of a government plan to achieve a substantial increase in defense-related outlays to 43 trillion yen until fiscal 2027.The expanded budget is designed to counter security threats from countries such as China, North Korea and Russia and boost security cooperation with the United States."
• Kyodo also notes that "Prime Minister Fumio Kishida believes that priority should be given to boosting the economy over fiscal rehabilitation." This stance could come amid Kishida's record-low approval ratings. The PM will need to see an increase in his support levels if he is not to face a leadership challenge at the Oct 2024 leadership conference for his governing Liberal Democratic Party.