The initial general-account budget for fiscal 2014, which starts April 1, is likely to total a record-high ¥96 trillion, according to government sources.
The Cabinet planned to approve the fiscal 2014 draft budget Tuesday, after making arrangements with the ruling Liberal Democratic Party, headed by Prime Minister Shinzo Abe, and its coalition partner, New Komeito.
For fiscal 2014, the government is expected to achieve its annual fiscal goals, including keeping new debt issuance below that of the previous year, as tax revenues are set to grow due in part to economic recovery and the sales tax hike.
If Abe’s administration attains the goals set in a medium-term fiscal rehabilitation plan released in August, it will pave the way for restoring the country’s precarious fiscal health, the worst among major industrialized economies.
But the government has yet to drastically cut expenditures, so it may face an uphill struggle to make ends meet in compiling its budgets after fiscal 2015, analysts said.
Under the draft budget, Japan’s policy spending for fiscal 2014, which will be utilized for social security programs and public works projects, is likely to expand to a record high of around ¥73 trillion, the sources said.
The central government’s tax receipts are expected to top ¥50 trillion in fiscal 2014, up about ¥7 trillion from the fiscal 2013 initial budget, given that the consumption tax will be raised to 8 percent from the current 5 percent next April and that corporate tax revenues may grow, they said.
Abe’s administration also plans to curb the new issuance of government bonds to around ¥42 trillion in fiscal 2014, down about ¥1 trillion set under the initial state budget for this fiscal year, the sources added.
Abe to attend Davos
Prime Minister Shinzo Abe plans to attend an annual meeting of the World Economic Forum starting Jan. 22 in the Swiss resort village of Davos, a government official said Monday.
Abe will explain his economic policies dubbed “Abenomics” and Japan’s growth strategies in front of world political and business leaders, the official said.
The Liberal Democratic Party-led government is considering convening the regular Diet session on Jan. 24. Abe’s schedule is expected to be tight if he attends the forum, with plans to visit Africa and India also slated for January.