Soaring social security costs forecast to generate record government spending in Japan Soaring social security costs forecast to generate record government spending in Japan

Soaring social security costs forecast to generate record government spending in Japan
26 Jan 2018

The Japanese government expects spending to reach an all-time high of 97.7 trillion yen (US$860 billion) in fiscal 2018 as social security spending soars.

General expenditure, which includes social security, public works, defence and education, is expected to rise to 58.9 trillion yen (US$520 billion). Social security will account for more than 30% of the total, partly due to higher medical and nursing costs.

According to Nikkei Asian Review, servicing national debt will cost around 23.3 trillion yen (US$210 billion), about 200 billion yen (US$177 billion) less than in the 2017 budget thanks to falling interest rates.

Japan aims to distribute about 15.5 trillion yen (US$140 billion) in tax revenues to its regional governments, down very slightly from last year.

Income

In terms of income, the government anticipates gaining around 59.1 trillion yen (US$520 billion) in tax revenues, the most in 27 years, as high corporate earnings are expected to bring in higher stock dividend payments. Other revenues, such as payments from the Bank of Japan, are poised to decline to 4.9 trillion yen (US$40 billion).

To close the budget gap, Japan will issue around 33.7 trillion yen (US$300 billion) in government bonds, down about 700 billion yen (US$618 billion) from last year and the lowest figure in nine years.

The country's primary budget balance - the gap between revenue and expenditure other than debt service - looks set to improve from a deficit of around 10.9 trillion yen (US$100 billion) for fiscal 2017 to a 10.4 trillion yen (US$90 billion) deficit in 2018.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The Japanese government expects spending to reach an all-time high of 97.7 trillion yen (US$860 billion) in fiscal 2018 as social security spending soars.

General expenditure, which includes social security, public works, defence and education, is expected to rise to 58.9 trillion yen (US$520 billion). Social security will account for more than 30% of the total, partly due to higher medical and nursing costs.

According to Nikkei Asian Review, servicing national debt will cost around 23.3 trillion yen (US$210 billion), about 200 billion yen (US$177 billion) less than in the 2017 budget thanks to falling interest rates.

Japan aims to distribute about 15.5 trillion yen (US$140 billion) in tax revenues to its regional governments, down very slightly from last year.

Income

In terms of income, the government anticipates gaining around 59.1 trillion yen (US$520 billion) in tax revenues, the most in 27 years, as high corporate earnings are expected to bring in higher stock dividend payments. Other revenues, such as payments from the Bank of Japan, are poised to decline to 4.9 trillion yen (US$40 billion).

To close the budget gap, Japan will issue around 33.7 trillion yen (US$300 billion) in government bonds, down about 700 billion yen (US$618 billion) from last year and the lowest figure in nine years.

The country's primary budget balance - the gap between revenue and expenditure other than debt service - looks set to improve from a deficit of around 10.9 trillion yen (US$100 billion) for fiscal 2017 to a 10.4 trillion yen (US$90 billion) deficit in 2018.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Leave a Reply

All blog comments are checked prior to publishing