The government is cutting foreign aid for the fifth consecutive year by approving a 4.8 percent reduction Wednesday in fiscal 2004 from the initially allocated amount for the current fiscal year.

The figure for the fiscal 2004 budget includes some 31.7 billion yen in grants for the reconstruction of Iraq.

The government is earmarking 816.9 billion yen for official development assistance for the year starting next April 1, down from 857.8 billion yen in the initial fiscal 2003 budget.