TOKYO, Sept. 4 (Xinhua) -- Budget requests from Japanese ministries and agencies for fiscal 2027 reached a record of about 143 trillion yen (around 915 billion U.S. dollars), marking the fourth consecutive year of record highs, the Finance Ministry said Friday.
The 143.07-trillion-yen request came in sharply above the more than 130 trillion yen projection reported by local media in late August, and marked a steep jump from the current fiscal year's initial budget of 122.31 trillion yen.
As many ministries also submitted "itemized requests" without specifying exact amounts, the final budget figure could climb even higher.
According to Kyodo News, the significant increase was driven partly by 12 trillion yen in requests under a new uncapped special investment category created to advance Prime Minister Sanae Takaichi's so-called "responsible and proactive" fiscal policy agenda, even as financial markets grow increasingly wary of her government's expanding fiscal commitments.
With outstanding debt twice the size of its economy, Japan's fiscal health is the worst among advanced economies, and rising interest rates are putting further pressure on the country's debt-servicing costs.
Among the requests, the Defense Ministry sought a record of about 8.84 trillion yen. Previous media reports said key spending areas will include procuring large numbers of interceptor drones, introducing artificial intelligence (AI) into command-and-control systems, and further deploying long-range missiles to strengthen what Japan calls "counterstrike capabilities."
The Health, Labor and Welfare Ministry filed the largest request at 36.58 trillion yen, reflecting mounting pension, health care and nursing care costs as the country's population continues to age.
The Ministry of Economy, Trade and Industry requested 5.70 trillion yen, including 4.53 trillion yen under the investment category for AI, semiconductors and other sectors.
Debt-servicing costs are set at a record 36.64 trillion yen, with the assumed interest rate used to calculate payments raised to 3.8 percent for fiscal 2027 from 3 percent in the fiscal 2026 budget.
Earlier reports suggested that the Japanese government has forecast tax revenue of about 83 trillion yen for fiscal 2026. That means budget requests topping 143 trillion yen will likely lead to new debt issuance, further straining the debt-ridden country's fiscal health.
The draft budget is expected to be finalized by the cabinet by the end of the year. The government plans to submit the budget bill during next year's regular parliamentary session and aims to secure its passage by the end of March. ■
