Japan's centre-left government on Friday approved a record 1.1-trillion-dollar budget for the next fiscal year that aims to boost the flagging economy but adds to a mountain of public debt. Prime Minister Naoto Kan's cabinet backed the 92.41 trillion yen draft budget for fiscal 2011 which starts on April 1.
To finance the massive outlays, Japan aims to issue fresh bonds worth 44.3 trillion yen - meaning that for the second year in a row new debt will be bigger than tax revenue, projected to raise just short of 41 trillion yen. "I think it is not a normal picture," said Banri Kaieda, minister in charge of economic and fiscal policy, commenting on the state of public finances. "We must correct it as soon as possible." Japan's public debt is already estimated at about 200 percent of gross domestic product, the highest level among industrialised nations.