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Japan enacts record budget of $870B

The Japanese parliament on Tuesday approved, and enacted, a record budget of 114.38 trillion yen (approximately $870 billion) for the next fiscal year, which begins on April 1, with defense spending increasing by 26.3% year-over-year.

Japan will spend a record 6.82 trillion yen (about $51.7 billion) on defense, a 26.3% increase over last year.

“The COVID-19 pandemic and Russia’s invasion of Ukraine have pushed the government to increase fiscal spending at a time when its financial health remains the worst among advanced economies, with outstanding debt more than twice the size of its GDP,” Tokyo-based Kyodo News reported.

After passing the draft budget last month, the House of Councilors, or upper house, approved the record spending for the new fiscal year.

Japan’s bicameral parliament, locally known as the Diet, is controlled by the ruling coalition of the Liberal Democratic Party and Komeito.

The debt-ridden nation of around 126 million people has also faced decades-high inflation, fueled by higher energy and raw material prices as the yen weakens.

The increase in Tokyo’s defense spending comes amid Japan’s focus on bolstering its defense capabilities, as social security costs continue to rise.

Japan is part of the US-led Quad, which also includes Australia and India, and is a loose security alliance aimed at containing China’s expanding economic and security influence in the wider Asia-Pacific region.

The costs associated with the realignment of American forces stationed in Japan will also be deducted from the defense budget.

Some 50,000 American soldiers are stationed in Japan under a bilateral security pact with the US.

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