Japan's Future Payment Obligations for Defense Goods Balloon

   Tokyo, Nov. 6 (Jiji Press)--Japan's future payment obligations based on existing defense equipment procurement contracts doubled to 9.45 trillion yen over the four years through fiscal 2023, the Board of Audit of Japan said Wednesday.
   According to the board, equipment such as ships and tanks often require time to build, leading the government to conclude contracts spanning multiple fiscal years. In such cases, payments are often made after the years when the contracts are sealed.
   Such future payments need to be budgeted as obligatory expenses in the years after the contracts are concluded. An increase in such obligations may put constraints on spending to procure new equipment and build facilities, resulting in budget rigidity.
   The board's investigations into defense equipment procurement contracts involving future obligations found that the amount of payments that must be made in subsequent years rose from about 4.69 trillion yen at the end of fiscal 2019 to 9.45 trillion yen four years later due to the expansion of defense spending.
   In December 2022, Japan decided to allocate 43 trillion yen to defense spending over the five years from fiscal 2023, up 15.53 trillion yen from the previously planned sum. As the total spending amount expanded, future payment obligations increased.

(2024/11/06-23:49)

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