Japanese Prime Minister Fumio Kishida speaks during a news conference at his official residence in Tokyo, Japan, October 28, 2022. Yoshikazu Tsuno/Pool via REUTERS
TOKYO, Dec 2 (Reuters) – Japan is set to earmark 40 trillion to 45 trillion yen ($295 billion-$333 billion) for defence spending over five years starting in the next fiscal year, which begins in April, three sources with knowledge of the matter told Reuters on Friday.
That would be a jump from the current five-year defence plan for spending 27.5 trillion yen, stoking worry about worsening one of the industrial world’s worst debt burdens, which amounts to twice the size of Japan’s annual economic output.
Prime Minister Fumio Kishida told key ministers on Monday to work on a plan to lift defence spending to an amount equivalent to 2% of gross domestic product within five years, from 1% now, as Japan faces an increasingly assertive China.
The key ministers – Finance Minister Shunichi Suzuki and Defence Minister Yasukazu Hamada – are expected to meet again with Kishida this month to iron out differences over the spending plan.
Defence authorities had informally floated an idea of spending in the upper range of 40 trillion yen over five years, while finance bureaucrats had sought spending along the lines of the current five-year plan.
($1 = 135.2300 yen)
Reporting by Takaya Yamaguchi and Yoshifumi Takemoto, Writing by Tetsushi Kajimoto Editing by Chang-Ran Kim and Gerry Doyle
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