TOKYO — Japan’s Cabinet approved a record $1.11 trillion draft budget yesterday, aimed at creating jobs and injecting life into the economy.
The budget for next fiscal year, which starts in April, includes measures to provide more education for new job seekers and drive innovation in green energy. Parliament must still approve the budget, and even though the chamber is growing increasingly fractious, the ruling party’s majority in the powerful lower house makes it likely to pass.
The budget reflects the ruling party’s promise to limit new debt, keeping new bond issuance below the level for the current year. It also includes a 7.4 percent cut to foreign assistance and a large cuts in funding for public works projects.
The budget is a crucial balancing act for Japan, which is struggling to keep its economic recovery alive while attempting to cut its massive public debt. Earlier this week, Japan’s central bank held interest rates at virtually zero and said the recovery “seems to be pausing,’’ while noting that exports are flat.