Japan's initial budget for fiscal 2021 will total about ¥106.61 trillion ($1.03 trillion), a record high for the ninth straight year, as it plans to add ¥5 trillion to reserve funds for future response to the coronavirus pandemic, government sources said Thursday.
Topping ¥100 trillion for the third year in a row, the budget for the year starting in April will far exceed fiscal 2020's initial budget of ¥102.66 trillion.
The budget has been drafted on the assumption that tax revenues will be about ¥57.45 trillion, down ¥6.07 trillion from the previous year, according to the sources.
To finance the new budget, the government plans to issue new bonds worth around ¥43.60 trillion, up ¥11.04 trillion from the current year's initial plan, marking the first year-on-year rise in 11 years on an initial basis, the sources said.
The government recently revised down its revenue estimate in fiscal 2020 to ¥55.13 trillion, given the impact of the pandemic on corporate earnings.
Social security costs, accounting for about a third of Japan's initial budget in recent years, will grow about ¥150 billion from fiscal 2020 due to the country's rapidly graying population, but at a slower pace than the government's earlier estimate of an increase of a few hundred billion yen, according to the sources.
Regardless, the figures could fuel concern about Japan's fiscal consolidation. The country's public debt exceeded ¥1,100 trillion, or well over 200% of gross domestic product, as of the end of fiscal 2019, the worst among major developed countries.
Prime Minister Yoshihide Suga's Cabinet is expected to approve the draft budget on Monday.