The Japanese government is set to compile a record $735 billion budget for the fiscal year from April due to increased social security and debt-servicing costs, adding to the industrial world’s heaviest debt.
Representatives of the media got acquainted with the draft budget of the mentioned Asian country. In this case, the record amount is because the Bank of Japan is shifting away from its ten-year economic stimulus program. In the context of the relevant situation, the government of an Asian country is facing a burden related to the need to increase efforts to boost the economic system.
At the same time, in an attempt to improve public finances, Tokyo plans to trim the issuance of new bonds next fiscal year to 28.6 trillion yen. It is worth clarifying that the current exchange rate of the yen is 0.0064 against the dollar.
For the first time in 17 years, Japan will issue new bonds of less than 30 trillion yen.
After decades of constant fiscal spending and reforms, Tokyo is facing the heaviest industrial public debt burden in the world. It is worth noting that this indicator is more than twice the size of its annual economic output.
The Bank of Japan’s rejection of a decade-long program of radical economic stimulus increases pressure on the fiscal health of the Asian country. The government of Japan can no longer rely on the effective bankroll of debt by the central bank.
In March, the Bank of Japan abandoned the monetary policy concept of negative interest rates. In July, the Asian country’s financial regulator raised its short-term policy rate to 0.25%.
The Governor of the Bank of Japan, Kazuo Ueda, signaled this week that the next increase in borrowing costs was approaching. He also said that the latest wage and price developments indicate that next year the Japanese economy will move closer to the sustainable achievement of the financial regulator’s inflation target of 2%.
The draft budget is expected to be approved by Japan’s Prime Minister Shigeru Ishiba’s cabinet this week for submission to parliament for deliberation early next year.
According to the draft budget, tax revenue will grow by 8.8 trillion yen and reach a record high of 78.4 trillion yen.
As we have reported earlier, Japan’s October Headline Inflation Rate Falls.
