National economy Japan's government launches record budget
Japan's government has launched a record budget of 122.3 trillion yen (around 616 billion Swiss francs) for the next fiscal year starting on April 1.
26.12.2025, 09:28
SDA
The draft is intended to finance both higher defense spending and rising social security costs, as local media reported on Friday. Head of government Sanae Takaichi wants to push ahead with Japan's military modernization in the face of deteriorating relations with China.
The defence ministry had declared that Japan was facing the "most serious and complex security situation" since the end of the Second World War and emphasized that defence capabilities needed to be "fundamentally" strengthened.
9 trillion yen (45.5 billion Swiss francs) has been earmarked in the budget for defense, including around 100 billion yen (505 million Swiss francs) for the planned coastal defense system "SHIELD". It is intended to deploy drones against enemy targets in the event of a possible invasion. Japan is aiming for completion by 2028.
A budget of 115 trillion yen has been requested for the current fiscal year, which runs until March 2026. The draft budget must now be passed by parliament.
The planned massive increase in government spending under Prime Minister Takaichi, who has been in office since October, is causing unrest on the financial markets. Japan is already the most indebted industrialized country in the world, with a public debt ratio of 232 percent of annual economic output expected for 2025.
