Japan's Strategic Budget Plan for Fiscal Stability

Japanese Prime Minister Sanae Takaichi announced a 122.3 trillion yen budget plan aimed at maintaining fiscal discipline while promoting economic growth. Despite its record size, the draft limits new government bond issuance to 29.6 trillion yen. The reliance on debt is set to decrease, reflecting Japan's commitment to fiscal sustainability.

Japanese Prime Minister Sanae Takaichi has moved to reassure markets regarding Japan's growing debt crisis, emphasizing her government's fiscal discipline in the latest draft budget. The budget, set to begin in April, amounts to 122.3 trillion yen, as revealed to ruling coalition executives.

Despite the unprecedented budget size, Takaichi noted that new government bond issuance will be contained at 29.6 trillion yen, marking a continuous effort to keep it below 30 trillion yen for a second consecutive year. The country's dependency on debt is projected to diminish to 24.2% from 24.9% in the fiscal 2025 budget, which fell below 30% for the first time in nearly three decades.

Takaichi stated, "We believe this draft budget strikes a balance between fiscal discipline and achieving a strong economy while ensuring fiscal sustainability." This underscores the government's dual focus on economic strength and financial prudence.

(With inputs from agencies.)