"We managed to make the annual budget slimmer than before"
- Finance Minister Taro Aso
Japanese government unveiled its budget for 2013, which includes spending cuts for the first time in seven years, adding to evidence that Shinzo Abe is putting efforts to establish fiscal-discipline credentials. The budget is aimed at the stimulation of tax revenues above new bond sales, however, it still relies on borrowing to cover 46.3% of its spending. On Tuesday, the Cabinet Office approved a proposed spending total of 92.6 trillion yen ($1 trillion), which is down 0.3% from this year's main budget. Abe and his government is facing the challenge of leading the world's third largest economy out from its third recession in five years, as well as containing a public debt, which is more than twice bigger than nation's gross domestic product.
"We managed to make the annual budget slimmer than before," Finance Minister Taro Aso told reporters. "Without the extra budget, the economy would fall into a severe situation in April-June."
"We need to see whether the government can carry out its growth strategy to boost the economy, thus increase tax revenue, and also whether it can continue to cut expenditure," said Yasuo Yamamoto, senior economist at Mizuho Research Institute.
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