admin TOKYO — The Finance Ministry has said that by the end of fiscal 2026, the balance of Japanese government bonds is expected to top ¥1,000 trillion even if Japan’s economy grows 3% annually in nominal terms, through measures to control inflammation and social security costs are taken.
According to the government’s draft budget for the year, which was submitted to the Diet recently, the balance is estimated to come to ¥900 trillion at the end of fiscal 2020, and the JGB balance will total ¥1,012 trillion at the March 31, 2027, end of fiscal 2026 and reach ¥1,064 trillion at the end of fiscal 2029.
The country’s social security expenditures, including medical expenses, nursing care outlays, and pensions will increase rapidly from fiscal 2022, when Japanese’s born in 1947-1949, will start turning 75 years old.
The ministry said, with the growth of spending seen outpacing that of tax revenue, the issue amount of new JGBs will begin increasing in fiscal 2022. The new JGB amount is currently expected to decrease for the 10th consecutive year through fiscal 2020.
In addition, debt-servicing costs are projected to grow, helping push up the total JGB balance.
The ministry also expects that the deficit in the country’s primary budget balance, or the gap between revenue, excluding from debt issues, and policy spending, will decrease to ¥6.6 trillion in fiscal 2023 from ¥9.2 trillion projected for fiscal 2020 on the assumption of 3% annual economic growth.
According to the ministry, the primary budget deficit is seen shrinking at a slower pace, coming to ¥8.7 trillion in fiscal 2023, if economic growth is limited at 1.5%.
Source: the-japan-news.com
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