Japan's 26 Trillion Yen Supplementary Budget... Entirely National Debt, Concerns Over Fiscal Soundness

Japanese Prime Minister Fumio Kishida

On the 31st, the Japanese House of Councillors approved the supplementary budget bill for the 2022 fiscal year (April 2022 to March 2023) submitted by the Kishida Fumio Cabinet, totaling 2.7009 trillion yen (approximately 26.2 trillion won) in total expenditures.

The main focus of this supplementary budget is economic measures to mitigate the impact of soaring crude oil prices and rising inflation. It includes subsidies of 1.1739 trillion yen to be paid to oil refining companies to curb gasoline price increases, and 1.52 trillion yen to replenish contingency funds used for the emergency inflation measures decided in April this year.

The supplementary budget funds will be entirely raised through the issuance of deficit-covering government bonds, which correspond to national debt. Combining the main budget and the supplementary budget, the amount of new government bonds issued in 2022 is expected to reach 39.6269 trillion yen (approximately 383 trillion won), raising concerns about fiscal soundness.

According to a recent report by the Asahi Shimbun, Japan's public debt ratio reached 256.9% of its Gross Domestic Product (GDP), significantly higher than major advanced countries such as the United States (133.3%) and Germany (72.5%).

This content was produced with the assistance of AI translation services.