Budget deliberations for next fiscal year begin, with record-high requests of 143 trillion yen
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The Fiscal System Subcommittee of the Fiscal System Council met on the 30th, marking the start of deliberations toward compiling the budget for fiscal 2027. Under the budget-making reforms of the Takaichi administration, which advocates "responsible proactive fiscal policy," the total budget requests from government ministries and agencies swelled to a record-high roughly 143 trillion yen. With long-term interest rates hovering at a high level in the 3 percent range, members drawn from academics and business executives urged caution over rising rates. Hiroya Masuda, the acting chairman, told a press conference after the subcommittee meeting that many members pointed to the importance of being mindful of market confidence in fiscal policy, and said that in compiling the budget "it is necessary to give sufficient thought to changes in the interest-rate environment." Members noted that the surge in global private-sector demand for funds accompanying the rapid spread of artificial intelligence is behind the rise in interest rates, and voiced the view that, regarding the consumption tax cut to be introduced next fiscal year and the new benefit program for low- and middle-income earners, securing funding sources and ensuring consistency with the existing social security system should be taken into account.