Japan's cabinet has approved a record 122.3 trillion yen ($785 billion) budget for the next fiscal year, pledging to keep government debt in check despite rising spending pressures.
Prime Minister Sanae Takaichi said the budget aims to support the economy while avoiding a sharp increase in government debt.
The highest government debt among rich countries
Although spending will rise, the government plans to borrow only slightly more than this year by issuing fewer new bonds than many had feared.
Higher tax income is expected to help pay for the extra costs, including social welfare, defence, and interest on existing debt. However, debt payments are becoming more expensive as interest rates rise.
Japan already has the highest government debt among rich countries, which means the government must be careful as it spends more and as borrowing becomes costlier.