TOKYO: Japan’s finance ministry is expected to request 26.9 trillion yen ($195.5 billion) for debt service in the fiscal year beginning in April 2023, the Yomiuri newspaper reported on Tuesday (August 23rd).
This would represent a 10.9% increase over the original debt service budget for this fiscal year, Yomiuri said, without citing sources.
The Ministry of Finance declined to comment on the report.
Rising costs of servicing the national debt, or interest payments and debt repayments, have highlighted the industrial world’s heaviest public debt burden that exceeds more than twice the size of the Japanese economy.
Debt service charges account for more than 20 percent of Japan’s annual budget expenditure, making it the second largest item after increases in social security spending.
Based on the government’s draft budget, Japanese ministries will submit their budget requests by the end of this month for negotiations to compile the draft budget at the end of December.
The draft budget did not set a hard cap on overall budget requests for 10 consecutive years, paving the way for the fiscal year 2023 budget to reach a record high, some analysts said.
According to the scheme, social budget requests can reach 560 billion yen to help fund the cost of supporting its aging population, which accounts for a third of the annual budget worth some 107 trillion yen.