The government expects its annual debt-servicing costs to rise to almost $230 billion over the next four years as the central bank’s campaign to gradually raise interest rates drives up financing costs.
Under the more optimistic of two projected growth scenarios, debt-servicing costs are seen rising to ¥35.3 trillion ($229 billion) in the year starting April 2028, according to estimates released Thursday by the finance ministry. This marks a 25% increase from projected costs in the coming fiscal year. Servicing Japan’s oversized debt is already expected to chew up close to a quarter of the annual budget for the year starting in April.
The latest projection underscores the growing financial strain Japan will likely face amid anticipated additional rate hikes by the central bank.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.