TOKYO - Japanese Prime Minister Shinzo Abe’s cabinet endorsed a record $860 billion budget for fiscal 2018 on Friday, opting to keep the economy on a sustained recovery with aggressive monetary stimulus and putting fiscal reforms on the back burner again.
The general-account budget spending for the next fiscal year starting April will total 97.7 trillion yen ($860 billion), the biggest amount ever and slightly more than this year’s initial plan to spend 97.5 trillion yen, the Ministry of Finance said.
The budget - a record high for the sixth year - got a boost from snowballing welfare spending to respond to a fast-ageing population and a record military outlay amid regional tensions related to North Korea . The demands strain the heaviest public debt burden in the industrialised world.
Japan’s defense outlays for the year starting April 1 will rise for a sixth straight year, increasing by 1.3 percent to 5.19 trillion yen ($45.76 billion), according to a budget breakdown published by the government. The biggest ticket item is 137 billion yen to reinforce defenses against a possible North Korean ballistic missile attack.
That includes purchases of a new longer range interceptor, the SM-3 Block IIA, designed to strike ballistic missiles in space, upgrades for the Patriot missile batteries that are the last line of defense against incoming warheads and preparations for the construction of two ground-based Aegis radar stations.
Japan will also spend 2.2 billion yen to begin acquiring medium-range air-launched cruise missiles able to strike sites in North Korea in a bid to deter any potential attack by Pyongyang, which continues to test ballistic missiles.