Japan's Ministry of Finance announced that various ministries have submitted budget requests for fiscal year 2027 totaling 143.07 trillion yen (approximately 918 billion US dollars), marking the fourth consecutive year of record-high requests. This includes a new special investment category with no spending cap, amounting to 12 trillion yen, in line with the proactive fiscal policy of Prime Minister Sanae Takaichi. Meanwhile, Japan's fiscal position is the worst among developed nations, and debt servicing costs have surged to a record 36.64 trillion yen, as the assumed interest rate was raised to 3.8% from 3.0% in fiscal year 2026. The Ministry of Health, Labour and Welfare submitted the largest request at 36.58 trillion yen, followed by the Ministry of Internal Affairs and Communications at 21.92 trillion yen, the Ministry of Defense at 8.84 trillion yen, and the Ministry of Economy, Trade and Industry at 5.70 trillion yen, which includes 4.53 trillion yen for AI and semiconductor investment. The Cabinet is expected to finalize the draft budget by the end of this year and submit it to the Diet for approval by the end of March next year.
