Tokyo's spending still on the rise despite giant public debt

Tokyo

JAPAN'S Prime Minister Shinzo Abe's Cabinet on Wednesday approved a record 96.34 trillion yen (S$1.1 trillion) budget for the fiscal year from April 1, marked by increases in defence and social security spending despite the government's precarious fiscal situation, with debt at more than twice the size of the economy.

Mr Abe, noting that new borrowing levels and the primary budget deficit will be reduced in fiscal 2015 from the current year because of rising government revenues, said: "I believe the budget will contribute to achieving economic revival and fiscal consolidation at the same time."

But analysts said that, despite the reduction in the primary deficit - the balance between government revenues minus new borrowings and expenditures minus intere…