The general account of Japan’s fiscal 2023 budget, approved at the end of 2022, calls for expenditures of a record high ¥114 trillion, with spending on defense exceeding public works and dependence on deficit-covering bonds surpassing 30%.

While Japan’s fiscal deficit as a percentage of nominal GDP declined in fiscal 2021 compared to the previous year—when pandemic relief payments caused a spike in spending—it nonetheless remains quite high, writes Research Director Nobuo Iizuka in the March/April issue of Japan Spotlight. There has been a steady rise in social security-related expenditures as a share of GDP since the early 2000s, but this has been offset somewhat by the rise in tax and social security revenues thanks to higher GDP.

In the January/February issue of Japan Spotlight, Iizuka notes that one of the industries hit hardest by the pandemic has been the accommodations sector. Movement restrictions and border control measures resulted in a huge drop in the number of guests, both Japanese and foreign.

The easing of restrictions since summer 2022 has led to an increase both in the number of guests and room occupancy rates, but both, Iizuka writes, were still considerably lower than pre-pandemic levels as of October 2022.

“Current Status of Japan’s Fiscal Balance,” Japan Spotlight
https://www.jef.or.jp/journal/pdf/248th_Economic_Indicators.pdf

“Is Japan’s Accommodation Service Industry Finally Overcoming the Coronavirus Pandemic?” Japan Spotlight
https://www.jef.or.jp/journal/pdf/247th_Economic_Indicators.pdf

Profile of Research Director Nobuo Iizuka
https://www.tokyofoundation.org/experts/detail.php?id=381