Japan’s Debt Exceeds 1 Quadrillion Yen as Abe Mulls Tax Rise
The country’s outstanding public debt including borrowings reached a record 1,008.6 trillion yen ($10.46 trillion) as of June 30, up 1.7 percent from three months earlier, the finance ministry said in Tokyo today. Larger than the economies of Germany, France and the U.K. combined, the amount includes 830.5 trillion yen in government bonds.
The world’s heaviest debt burden will weigh on Abe when he decides next month whether to implement a two-step plan to double the tax on consumers in a nation with ballooning welfare costs. While boosting the levy would drag on growth, Moody’s Investors Service yesterday warned that a worsening of finances would erode confidence in government bonds.
Japan will still run a primary budget balance deficit equivalent to 2 percent of the economy in the fiscal year starting April 2020 even if it raises the tax as planned, a Cabinet Office estimate showed yesterday.