Japan is set to earmark 40 trillion to 43 trillion yen ($295 billion-$318 billion) for defence spending over five years starting in the next fiscal year, which begins in April, three sources with knowledge of the matter told Reuters on Friday, Trend reports citing Reuters.
That would be a jump from the current five-year defence plan for spending 27.5 trillion yen, stoking worry about worsening one of the industrial world's worst debt burdens, which amounts to twice the size of Japan's annual economic output.
The new numbers marked a compromise between the defence and finance ministries, the three sources said. Until recently, the defence ministry had sought 48 trillion yen, while the finance ministry had multiple options centring around 35 trillion yen.
Prime Minister Fumio Kishida told key ministers on Monday to work on a plan to lift defence spending to an amount equivalent to 2% of gross domestic product within five years, from 1% now, as Tokyo faces an increasingly assertive Beijing.
The key ministers - Finance Minister Shunichi Suzuki and Defence Minister Yasukazu Hamada - are expected to meet again with Kishida this month to iron out differences over the spending plan. The Finance Ministry declined to comment.