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Japan approves record spending plan for 2017/18

Thursday, December 22, 2016 - 01:18

Japan's cabinet approves a record $830 billion spending budget for fiscal 2017. As David Pollard reports, it counts on low interest rates and a weak yen to limit borrowing as Tokyo strives to curb the industrial world's heaviest debt burden.

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It's been going nowhere fast, according to its critics ... a Japanese economy straining to move forward. A new spending plan for fiscal 2017 could give it a nudge. 97.5 trillion yen - around 830 billion dollars - confirmed by the Japanese finance minister - is the highest ever for a preliminary budget. With supplementary budgets it could go well beyond that. This year's spending has already exceeded 100 trillion. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "There is a bit of evidence of things improving, but I think to move decidedly out of their stagflation situation, they need to do something more. Everyone is looking at it with a bit of a concern, because it means basically that there is still more funding to be done. But interest rates are very low in terms of the yields they have to pay, so they should be able to fund it very easily." Burdened with the heaviest debt in the industrial world, a weak yen may also help to keep borrowing down. But extra budgets will almost inevitably mean more need to issue debt. That's lax fiscal discipline, say the critics. Even as the government aims to take some of the heavy lifting off an already massive QE monetary programme.

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Japan approves record spending plan for 2017/18

Thursday, December 22, 2016 - 01:18