Preliminary budget requests for fiscal 2027 are expected to reach a record total of around ¥140 trillion, with government ministries expanding spending in growth sectors through the newly established “Strong and Prosperous Japan” investment framework. Significant investment has been earmarked for advanced fields including AI and semiconductors.
Preliminary budget requests for fiscal 2027, submitted ahead of the budget compilation process, have reached their deadline, with the general account total expected to come to around ¥140 trillion. The figure is seen as roughly equivalent to the combined total of the initial FY2026 budget and the ¥18.3 trillion supplementary budget, with the expansion of the investment framework cited as the main factor.
The government has established a “Strong and Prosperous Japan” investment framework under its policy of responsible and proactive fiscal management, with plans to invest more than ¥370 trillion through public-private initiatives. The framework has no upper limit, allowing ministries to freely expand investment in growth sectors.
The Ministry of Economy, Trade and Industry used the framework to request a total of ¥4.5 trillion for advanced fields including AI, semiconductors and robotics. Meanwhile, the Ministry of Finance has budgeted a record ¥36.6 trillion for national debt service, creating a structure in which mandatory spending and new investment are driving up the total.
The government’s policy of moving away from supplementary budgets is also contributing to the expansion. Ministries have been instructed to include in their initial preliminary budget requests expenses that were previously included in supplementary budgets. The balance between fiscal consolidation and growth investment is expected to be a focus going forward.