Japan's general-account budget for fiscal 2015 is likely to reach a record high of around ¥96.9 trillion ($806.1 billion), topping the ¥95.9 trillion set aside for the initial budget for fiscal 2014, Finance Ministry sources said on Wednesday.
With welfare and medical expenses swelling due to the country's aging population, social security expenditures are likely to increase to more than ¥31.5 trillion, exceeding ¥30 trillion for the second consecutive year, they said.
The government plans to slash new bond issuance by more than ¥3 trillion from the previous year to around ¥37.8 trillion, as it projects tax revenue growth as corporate profits improve on the back of the weaker yen, the sources said.
If that comes to pass, it would be the first time in six years that new debt issuance would be kept below ¥40 trillion.
Central government tax revenue in fiscal 2015 was expected to total about ¥54.1 trillion, the highest level in 22 years, the sources said.
The government is scheduled to endorse the fiscal 2015 budget on Jan. 14.