Japan's LDP Proposes Govt Use of Stopgap Bonds

Tokyo, May 28 (Jiji Press)--A panel of Japan's ruling Liberal Democratic Party presented a draft proposal Thursday calling for the use of stopgap bonds to fund the government's investment in crisis management and growth measures.

The proposal by the LDP's Japan's Growth Strategy Headquarters, led by former Prime Minister Fumio Kishida, calls for using stopgap bonds, which are issued with future redemption sources designated by law, and managing them separately from fiscal indicators.

The proposal states that funding through stopgap bonds should be managed in indicators, such as the ratio of debt to gross domestic product and the primary fiscal balance, by excluding expenses and financial resources.

This means that even if the government issues such bonds, it does not have to worry about the impact on fiscal indicators.

Critics say that while issuing such bonds may prevent a deterioration in public finances numerically, the government still needs to secure funds for redeeming them.

[Copyright The Jiji Press, Ltd.]