Outstanding JGB Balance To Top Y1,000tln In 10 Years

TOKYO (Nikkei)--The balance of outstanding Japanese government bonds will likely reach 1,014 trillion yen at the end of the fiscal 2022, up from 732 trillion yen expected as of March 31, 2014, the Ministry of Finance said Wednesday.

In addition to rising costs of social security for the aging population, higher interest rates resulting from nominal economic growth will likely increase the cost of interest payments on JGBs.

The Finance Ministry's calculations -- submitted for deliberation as part of fiscal 2013 budget proposals -- used a nominal economic growth rate of 3%, assuming that Prime Minister Shinzo Abe's economic policy succeeds.

While tax revenue is projected to increase, long-term interest rates are also seen climbing, adding to debt-servicing expenses.

The government's finances will likely remain tight even after the higher consumption tax begin to take effect in April 2014.

(The Nikkei, March 7 morning edition)

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