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Japan’s Parliament Approves Record USD766B Budget for Fiscal 2026
(MENAFN) Japan's parliament approved a landmark 122.31 trillion yen (approximately $766 billion) national budget for fiscal 2026 on Tuesday, marking the first time in over a decade that the country's annual spending plan failed to clear before the April 1 fiscal year deadline.
The general account budget notches a record high for the second straight year, driven largely by swelling welfare costs tied to Japan's rapidly aging population. Notably, the plan allocates more than 9 trillion yen to defense-related expenditures for the first time ever — a move that has drawn sharp public backlash.
The spending blueprint reflects Prime Minister Sanae Takaichi's aggressive, growth-oriented fiscal approach. However, it conspicuously omits any relief measures to counter soaring energy and living costs exacerbated by the ongoing Middle East conflict — an omission that has prompted opposition legislators to urge the government to consider an emergency supplementary budget.
Despite year-on-year revenue growth, Tokyo plans to plug a remaining gap by issuing 29.58 trillion yen in new bonds — a move that lays bare Japan's entrenched dependence on debt financing at a moment when its fiscal position remains the weakest among all G7 economies.
Passage was not without hurdles. The ruling coalition — comprising the Liberal Democratic Party (LDP) and the Japan Innovation Party — commands only a minority in the 248-seat House of Councillors, and the budget ultimately cleared that chamber only after peeling away support from select opposition members. The bill had previously passed the more powerful House of Representatives on March 13, after Takaichi controversially compressed deliberations, leveraging the commanding supermajority her LDP secured in the February 8 general election — a maneuver that drew fierce protest from opposition ranks.
With the full budget arriving too late to take effect on schedule, an interim stopgap measure worth 8.56 trillion yen was enacted on March 30 to sustain government operations through the first 11 days of April. That provisional budget will be folded into — and rendered void by — the now-enacted fiscal 2026 plan once it formally takes effect.
The general account budget notches a record high for the second straight year, driven largely by swelling welfare costs tied to Japan's rapidly aging population. Notably, the plan allocates more than 9 trillion yen to defense-related expenditures for the first time ever — a move that has drawn sharp public backlash.
The spending blueprint reflects Prime Minister Sanae Takaichi's aggressive, growth-oriented fiscal approach. However, it conspicuously omits any relief measures to counter soaring energy and living costs exacerbated by the ongoing Middle East conflict — an omission that has prompted opposition legislators to urge the government to consider an emergency supplementary budget.
Despite year-on-year revenue growth, Tokyo plans to plug a remaining gap by issuing 29.58 trillion yen in new bonds — a move that lays bare Japan's entrenched dependence on debt financing at a moment when its fiscal position remains the weakest among all G7 economies.
Passage was not without hurdles. The ruling coalition — comprising the Liberal Democratic Party (LDP) and the Japan Innovation Party — commands only a minority in the 248-seat House of Councillors, and the budget ultimately cleared that chamber only after peeling away support from select opposition members. The bill had previously passed the more powerful House of Representatives on March 13, after Takaichi controversially compressed deliberations, leveraging the commanding supermajority her LDP secured in the February 8 general election — a maneuver that drew fierce protest from opposition ranks.
With the full budget arriving too late to take effect on schedule, an interim stopgap measure worth 8.56 trillion yen was enacted on March 30 to sustain government operations through the first 11 days of April. That provisional budget will be folded into — and rendered void by — the now-enacted fiscal 2026 plan once it formally takes effect.
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