JAPAN’S RECORD $1 TRILLION BUDGET TO BATTLE DEBT, COVID

Japan’s cabinet approved on Monday, December 21, 2020, a record $1.03 trillion budget draft for the next fiscal year starting in April 2021, the Ministry of Finance said, as the coronavirus and stimulus spending puts pressure on already dire public finances, Tetsushi Kajimoto reported for Reuters.

The 106.6 trillion yen ($1.03 trillion) annual budget also got a boost from record military and welfare outlays. It marked a 4% rise from this year’s initial level, rising for nine years in a row, with new debt making up more than a third of revenue.

From Europe to America, policymakers globally have unleashed a torrent of monetary and fiscal stimulus to prevent a deep and prolonged recession as the pandemic shut international borders and sent many out of work.

In Japan, fiscal reform has been shelved as Prime Minister Yoshihide Suga prioritized efforts to contain the pandemic and boost growth, despite public debt at more than twice the size of Japan’s $5 trillion economy.

“How to balance the coronavirus response with fiscal reform has hardly been debated in Japan,” said Izuru Kato, chief economist at Totan Research. “Ultra-low interest rates under the Bank of Japan’s prolonged monetary easing may have caused fiscal discipline to be paralyzed.”

WEEKLY FEATURE

CHINKEE TAN SEEKS TO CREATE 100 MILLIONAIRES IN 2021