Korea has higher welfare budget as a percentage of GDP than Japan’s.

The Strategy and Finance Ministry said on Thursday that Korea’s welfare budget to GDP ratio was 7.6 percent, 1.5 percent higher than Japan’s 6.1 percent. Japan’s total welfare budget is three times larger than Korea’s (106.4 trillion won or 99.1 billion US dollars). However, given the size of the economy, Korea’s welfare budget as a percentage of GDP was higher than Japan’s.

Japan’s Upper House passed the 2014 fiscal budget (Mar. 2014 – Mar. 2014) including the welfare budget of 30.5 trillion yen (29.8 billion dollars) on Mar. 20. Japan’s welfare budget jumped 4.8 percent year-on-year, exceeding 30 trillion yen (293 billion dollars) for the first time because it spends more on social welfare such as medical expenses and pensions due to aging. The amount accounts for 6.1 percent of Japan’s GDP (499.7 trillion yen or (4.7 trillion dollars).

Kwon Jun-ho, head of budget management team at the Strategy and Finance Ministry, said, “Although Korea has a higher welfare budget to GDP ratio than Japan, Japan is two percentage points higher than Korea in terms of welfare budget as a percentage of total budget.” The welfare budget to total budget ratio stands at 29.9 percent in Korea and 31.8 percent in Japan.

Japan’s general budget this year increased 3.5 percent from last year to 95.9 trillion yen (939 billion dollars). Infrastructure projects (12.9 percent) had a sharp increase due to Japan’s economic stimulus measures. Its defense budget rose 2.8 percent from last year to 4.9 trillion yen (47.9 billion dollars). Its defense budget is larger than Korea (36 trillion won or 33.5 billion dollars) but Korea had a higher defense budget to GDP ratio (2.5 percent) than Japan (1 percent).