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Japan Approves Record $730 Billion Budget for 2025, Aims for 2% GDP Defense Spending Amid Challenges

Dec 31, 2024, 10:01 PM

Japan has approved a record budget of $730 billion (774.1 billion euros or 115.54 trillion yen) for the fiscal year 2025, amidst political tensions and economic challenges. The budget includes a significant increase in defense spending, with the cabinet approving a new defense budget of $55.13 billion, marking the 13th consecutive year of increased defense allocations and a 9.4% increase from the previous year. This move is part of Japan's effort to raise defense spending to 2% of its gross domestic product by fiscal 2027. However, the country faces obstacles such as inflation, a weakening yen, and political uncertainty, which are impacting its military buildup plans. Additionally, the government plans to reduce its bond issuance by 20% next year.