According to the Ministry of Finance, in the budget four years from now, the cost of repaying government bonds and interest payments will increase by 4.5 trillion yen compared to the budget proposal for the new fiscal year (FY2023), accounting for one-fourth of the total expenditure. I have summarized the calculations.
We expect interest rates to rise in addition to higher debt balances.
Based on the budget proposal for the new fiscal year, the Ministry of Finance has announced the results of a trial calculation of the budget size until FY2016, assuming that nominal growth of about 3% will continue.
According to this, the total amount of the general account is expected to be 115.6 trillion yen, an increase of 1.2 trillion yen from the new fiscal year, because social security costs will increase due to the aging population.
Assuming that the long-term interest rate will rise to 1.6%, the government debt service, which will be used to repay government bonds and pay interest, is expected to increase by 4.5 trillion yen from the budget for the new fiscal year to 29.8 trillion yen. is.
It is a scale equivalent to a quarter of the total expenditure, and the trend of fiscal pressure due to an increase in the outstanding balance of government bonds and a rise in interest rates will become more pronounced.
On the other hand, tax revenue will increase by 8 trillion yen due to economic growth, and the amount of new government bond issuance to make up for the shortfall will be 32.3 trillion yen, a decrease of 3.3 trillion yen compared to the new fiscal year. The severe fiscal situation is expected to continue, with more than one-fourth of the national debt covered by government bonds.