Japan's Defense Budget for Next Year Hits Record High of 66 Trillion Yen, Up 26%

Establishment of the 'Defense Capability Enhancement Fund' Collecting Non-Tax Revenues
8.283 Trillion Yen Allocated for Ammunition and Missile Purchases

[Asia Economy Reporter Geum Bo-ryeong] The Japanese government has allocated next year's defense budget at approximately 66 trillion won, a 26% increase from this year. This is the highest amount ever.

On the 23rd, the Japanese government decided on a general account budget plan for the 2023 fiscal year (April 2023 to March 2024) amounting to 114.38 trillion yen (about 1,105 trillion won) at an extraordinary cabinet meeting. This is a 6.3% (about 6.8 trillion yen) increase from the 2022 fiscal year general account budget of 107.5964 trillion yen.

The Japanese government budget is expected to record the highest amount for 11 consecutive years.

One of the main reasons for the budget increase is the increase in defense spending to strengthen defense capabilities. The defense budget, including U.S. realignment costs, is 6.8 trillion yen (about 65.7 trillion won), the largest ever. Considering that the defense budget reflected in the 2022 fiscal year main budget was 5.4 trillion yen, this is a 26% increase.

Japanese Maritime Self-Defense Force destroyer escort 'Izumo' (Photo by AP Yonhap News)

Separately, 4.6 trillion yen was calculated and reflected to establish a "Defense Capability Enhancement Fund," which collects non-tax revenues and others for future defense capability strengthening.

In the National Security Strategy revised on the 16th, the Japanese government decided to increase the defense budget from the 1% level of GDP in the 2022 fiscal year to 2% of GDP by the 2027 fiscal year.

To fundamentally strengthen defense capabilities, including securing counterattack capabilities, about 43 trillion yen will be secured for defense spending over the next five years (2023?2027 fiscal years). This is 56% more than the 27.47 trillion yen reflected in the current "Mid-Term Defense Capability Development Plan" (five years from 2019 to 2023 fiscal years).

The cost for purchasing ammunition and missiles to strengthen the Self-Defense Forces' combat sustainability has also been allocated 828.3 billion yen for next year. Compared to the existing amount, this is about four times higher.

Additionally, Japan plans to purchase U.S.-made Tomahawk cruise missiles for 211.3 billion yen. Research expenses for hypersonic guided missiles were reflected at 58.5 billion yen.

The Japanese government announced its policy to finance the shortfall of 35.62 trillion yen in next year's revenue through new government bond issuance.

The 2023 fiscal year budget containing these details is expected to be processed by the National Diet by the end of March next year.

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