STOCK MARKET WATCH -- Monday, 23 December 2013

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30. Japan Unveils Record 2014 Budget Draft as Debt Burden Mounts

http://www.bloomberg.com/news/2013-12-21/japan-unveils-record-budget-even-as-abe-trims-new-bond-sales.html

Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden.

Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Aso said, less than the 42.9 trillion yen earmarked in this year’s initial budget.

Abe aims to pull the country out of a 15-year deflationary malaise and cope with the rising welfare costs of its aging population, while containing public debt that’s more than twice the size of the economy. His government has pledged to halve the primary balance deficit by fiscal 2015 and achieve a surplus by fiscal 2020.

“The government needs to show that it’s moving in the right direction on fiscal discipline but this budget lacks punch,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The government must cut spending to reach the planned target of a surplus in 2020.”