The Cabinet on Friday approved a record ¥115.5 trillion ($735 billion) budget proposal for fiscal 2025 starting in April, surpassing last year’s record of ¥114.3 trillion.

The proposal exceeded ¥110 trillion for the third consecutive year in order to increase spending on defense, social welfare costs for a rapidly aging population and regional economies.

Defense spending will increase by 9.5% to ¥8.6 trillion amid an ambitious five-year ¥43 trillion program that aims to allocate 2% of GDP to defense by 2027.