JGB Balance Seen Topping 1,000 T. Yen in FY 2026

Politics

Tokyo, Jan. 25 (Jiji Press)--The balance of Japanese government bonds is expected to top 1,000 trillion yen at the end of fiscal 2026 unless measures to control swelling social security costs are taken even if Japan's economy grows 3 pct annually in nominal terms, the Ministry of Finance has said.

Under the scenario, the JGB balance will total 1,012 trillion yen at the March 31, 2027, end of fiscal 2026 and reach 1,064 trillion yen at the end of fiscal 2029, according to the ministry's projections, which were submitted to the Diet, Japan's parliament, on Friday.

The balance is estimated to come to 900 trillion at the end of fiscal 2020, according to the government's draft budget for the year, which was submitted to the Diet recently.

The country's social security expenditures, including pensions, medical expenses and nursing care outlays, will increase rapidly from fiscal 2022, when postwar baby boomers, or those born in 1947-1949, will start turning 75 years old.

With the growth of spending seen outpacing that of tax revenue, the issue amount of new JGBs will begin increasing in fiscal 2022, the MOF said. The new JGB amount is currently expected to decrease for the 10th consecutive year through fiscal 2020.

[Copyright The Jiji Press, Ltd.]

Jiji Press