With the Bank of Japan lifting its negative interest rate policy and the arrival of a ``world with interest rates,'' an advisory body to the Minister of Finance announced at a meeting on the 4th that interest payments on government bonds will increase if interest rates rise in the future. We exchanged opinions on issues related to fiscal management, such as:
At its meeting on the 4th, the Fiscal System Council exchanged opinions on future issues in fiscal management, taking into account the Bank of Japan's lifting of its negative interest rate policy.
The Ministry of Finance announced in February this year that long-term interest rates are expected to rise in the future based on market trends, but this time interest rates from next fiscal year onwards will be lower than expected due to unexpected changes in the economic situation. We have calculated the impact on interest payments if the interest rate increases by 1%.
According to this, if the current level of new government bond issuance of over 30 trillion yen continues, interest payments in 2033, nine years from now, will be 8.7 trillion yen higher.
Committee members
expressed the opinion that
▽we should work on fiscal consolidation without relying on the current low interest rates, and
▽we need to make efforts to reduce interest payments so that we can make the necessary fiscal stimulus in the event of an emergency.
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Council Subcommittee Chairman Hiroya Masuda said at a press conference, ``Even if we enter a world with interest rates, we must maintain fiscal sustainability.While paying close attention to the Bank of Japan's monetary policy going forward, we will continue to improve fiscal management.'' I would like to recommend the direction we should take."