The government on Friday gave cabinet approval for guidelines on budget requests by ministries and agencies for fiscal 2026.
The guidelines allow ministries and agencies to request 20% more funds than in the fiscal 2025 initial budget for priority policy measures, including those to cope with rising prices.
Total budget requests for the year from next April are likely to surpass ¥110 trillion for the fifth consecutive year.
Ministries and agencies will submit their budget requests by the end of this month, and the Finance Ministry will examine the requests to draft a fiscal 2026 government budget by the end of the year.
The guidelines estimate that social security costs, which account for the largest portion of government expenditures, will automatically increase by ¥400 billion, smaller than the ¥410 billion under the previous year's guidelines, reflecting a slower increase in the elderly population.
Still, these costs are expected to expand from the estimate after taking into account wage and price hikes.
Ministries and agencies are allowed to increase their requests for discretionary funds for priority policies by up to ¥2.8 trillion in total.
Funding to make high school tuition free, as agreed upon by the ruling Liberal Democratic Party-Komeito coalition and Nippon Ishin no Kai, will be discussed during the budget compilation process.
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