The Ministry of Finance estimates that if long-term interest rates rise, the cost of paying interest on national bonds in the budget for FY2020, four years from now, will increase by about 1.6 times compared to the budget proposal for the new fiscal year, FY2020. It has been announced.
Based on the new fiscal year's budget proposal, the Ministry of Finance has calculated the budget size until FY2020, assuming that nominal growth will continue at a relatively high rate of around 3%.
According to this, the total amount in the general account is expected to be 123.1 trillion yen, 10.5 trillion yen more than the budget proposal for the new fiscal year, as social security expenses will increase due to the strengthening of measures against the aging population and declining birthrate.
Of this amount, ``national debt expenses,'' which will be used for the redemption of national bonds and interest payments, is expected to increase by 7.2 trillion yen to 34.2 trillion yen.
In particular, interest payments are expected to increase to 15.3 trillion yen, 1.6 times the budget proposal for the new fiscal year, assuming that long-term interest rates rise to 2.4% in four years based on future market forecasts.
On the other hand, although tax revenue will increase by 11.2 trillion yen to 80.8 trillion yen due to economic growth, the amount of new government bonds issued will remain at the same level at 34.8 trillion yen, and nearly 30% of revenue will be financed by debt. The difficult financial situation is expected to continue.