Marking a record high for the sixth year in a row, the initial budget plan for fiscal 2018 is 97.7 trillion yen ($862.3 billion) in the general account, reflecting rising social security costs and increasing defense expenditures.

The general account in the budget plan, adopted in a Cabinet meeting on Dec. 22, is up 0.3 percent from the corresponding figure for fiscal 2017.

Based on the assumption that the current bullish economy will continue, the budget projects tax revenues of 59.1 trillion yen, an increase of 1.4 trillion yen from fiscal 2017 and the highest in 27 years following 59.8 trillion yen in fiscal 1991.

Due to the increased tax revenues, the government will decrease issuance of new government bonds by 677.6 billion yen to 33.7 trillion yen.

However, the government’s serious financial situation will continue as the ratio of its debts to total revenue is still as high as 34.5 percent.

In the budget plan for fiscal 2018, which starts in April, the total amount of expenditures increased due to rising social security costs, which account for about one-third the amount.

With the aging of the population, costs for such items as medical services and nursing-care services reached 33.0 trillion yen, up 1.5 percent from the initial budget plan for fiscal 2017.

The government also raised the so-called “official prices” in medical and nursing-care services, which are the payments to medical institutions or nursing-care facilities from the government’s budget and other sources.

In keeping with the Abe administration's policy pledge of “Hitozukuri-kakumei” (Revolution for developing people), the budget plan for fiscal 2018 earmarked 115.2 billion yen for operating costs of child-care facilities to reduce the number on waiting lists for admission by 110,000. The 115.2 billion yen includes contributions paid by operators of those facilities.

The defense budget increased by 1.3 percent to 5.2 trillion yen, marking a record high for the fourth year in a row. The budget includes 700 million yen for research and other costs for the introduction of Aegis Ashore, a land-based missile defense system to intercept missiles launched from abroad.

The planned installation of two units of the Aegis Ashore system is intended to deal with the threat of a ballistic missile launch from North Korea, which is accelerating its nuclear and missile development programs.