Even if a nominally higher economic growth rate of 3% is achieved against the backdrop of continued swelling of expenditures such as social security expenses, government bonds will account for about 30% of the revenue in FY7, and severe financial management will continue. The outlook was found by the Ministry of Finance's estimates.
The Ministry of Finance has announced the results of a mechanical trial calculation of the budget scale up to FY7, after reflecting the systems and policies included in the budget for the new fiscal year and FY4.
According to this, if it is assumed that the economic growth rate of 3% will continue to be nominally high against the background of the increase in social security costs due to aging and the increase in government bond costs for redemption of government bonds and interest payments. , The total amount of the general account for the 7th fiscal year of Reiwa is expected to reach 111.6 trillion yen, which is 4 trillion yen more than the new fiscal year.
Revenues, on the other hand, are expected to increase tax revenues, but the amount of new government bond issuance to make up for the shortfall is expected to reach 33.9 trillion yen.
Although it will decrease by 3 trillion yen compared to the new fiscal year, it has become clear that the strict fiscal management, in which government bonds account for about 30% of revenue, will continue.
Furthermore, if the growth rate is nominally 1.5%, the amount of new issuance of government bonds in Reiwa 7 will be 35.9 trillion yen, which is a decrease of only 1 trillion yen compared to the new fiscal year. The government will be required to raise both the growth rate and spending reform in order to improve the soundness of the government.