Japan's spending to help the economy mitigate the shocks of the COVID-19 pandemic and accelerating inflation will likely total around 68.5 trillion yen ($471 billion) in the four years to fiscal 2023, a Kyodo News analysis showed Saturday.

With most of the funding coming from debt issuance and the government's goal of restoring fiscal health taking a backseat, Prime Minister Fumio Kishida faces the urgent task of carrying out spending reforms as the world's third-largest economy recovers from the economic slump.

Kyodo News used data submitted by the private-sector members of a key government panel on fiscal policy and official figures in measuring the size of spending.

File photo taken on Jan. 13, 2021, shows Japan's Finance Ministry in Tokyo. (Kyodo)

Based on the calculations, the government spent 28 trillion yen in fiscal 2020, 15.4 trillion yen in fiscal 2021 and 15.1 trillion yen in fiscal 2022. The relevant figure for fiscal 2023 through next March stands at 10 trillion yen.

Japan's total annual spending, meanwhile, was somewhere between 130 trillion yen and 150 trillion yen for the past three years, with a record 114.38 trillion yen allocated in the fiscal 2023 general account budget.

Despite having the worst fiscal health among advanced economies, Japan has boosted spending to support households and businesses affected by the pandemic and rising prices. Surging fuel costs, partly due to Russia's war in Ukraine since February 2022, have been a factor in driving up prices.

Emergency programs implemented in recent years include 100,000 yen cash handouts to all citizens, financial support for local municipalities to increase bed capacity to treat COVID patients, and subsidies to lower energy costs for households and businesses.

Part of the funding also went towards promoting the controversial "My Number" national identification system by awarding cardholders points that can be used in cashless payments.

The ID card system is designed to streamline government services and reduce paperwork via digitalization but has recently created headaches for Kishida in the wake of reports that authorities had mishandled personal information.

Despite its goal of turning a surplus in the primary balance -- tax revenues minus spending except for debt-servicing costs -- by fiscal 2025, Japan is still far from achieving it.

In late July, private-sector members of the Council on Economic and Fiscal Policy submitted data on the primary balance as a percentage of gross domestic product.

The data showed Japan's deteriorating fiscal health, as the relevant figure worsened by between 1.7 and 5.2 percentage points during the four-year period, compared with a scenario of no such additional spending on COVID and inflation relief measures.

The country's debt is projected to approach 1,100 trillion yen in fiscal 2023, nearly twice the size of the economy, while the Bank of Japan's massive holdings of government bonds have helped prevent a spike in yields and debt-servicing costs.

Spending reform is taking on greater importance as Japan plans to spend a combined 43 trillion yen on bolstering its defenses in the five years to fiscal 2027 and boost child-care support to reverse the falling birthrate.

The government is aiming to shift from crisis-mode spending to that of "peacetime" when it compiles a budget for fiscal 2024.

Still, uncertainty remains over how bold spending cuts will be. The ruling Liberal Democratic Party, along with its junior coalition partner Komeito, may be tempted to boost spending to support households and the broader economy if Kishida fails to shore up flagging public support, observers say.