Japanese Public Debt Hits New Record High
Tokyo, August 10 (RHC)-- Yields on Japanese government bonds yesterday fell half a basis point to 0.795 percent after rising to a one-month high of 0.81 percent on August 7 on concerns the bill might fail.
Even with a sales tax increase, the Japanese government said in January that it will probably miss its goal of achieving a primary balance surplus, which excludes debt servicing costs, by fiscal year 2020. It forecast a primary deficit of between 1.9 percent and 3.1 percent of gross domestic product in that year, compared with the fiscal 2011 deficit of 7.4 percent.
The International Monetary Fund and the Organization for Economic Cooperation and Development have both urged Japan to be more aggressive in tackling a debt that the OECD predicts will reach 223 percent of the GDP next year.
Japanese Prime Minister Yoshihiko Noda won parliamentary approval for his bill to raise the country’s sales tax for the first time in 15 years, a move that split his ruling party and weakened its election prospects. On Thursday, the opposition-controlled upper house yesterday legislation to double the five percent tax by 2015 after Noda this week reaffirmed a deal with two opposition parties, pledging in return to call elections “soon.”