Japan's total debt rose to a record 1,342.17 trillion yen ($8.6 trillion) at the end of 2025, Finance Ministry data showed Tuesday, as Prime Minister Sanae Takaichi's pledge to expand spending cast doubt over the outlook for the country's fiscal health.
The debt, up 24.54 trillion yen from a year earlier, is more than twice the size of its economy and faces upward pressure due to ballooning social security, national defense and debt-servicing costs, reflecting higher government bond yields in tandem with increases in long-term interest rates.
Japan's debt surpassed the 1,000 trillion yen mark in 2013 and rose further during the COVID-19 pandemic. The ministry expects that it will reach 1,473.5 trillion yen by the end of March this year.
The data comes as concerns over fiscal health mount after the supplementary budget for the current year ending March to finance Takaichi's expansionary stimulus package reached 18.3 trillion yen, the largest since fiscal 2022 during the coronavirus pandemic.
But as tax revenues are not enough to fund it, the government plans to issue 11.7 trillion yen in new bonds to cover more than 60 percent of the total.
Under the banner of "responsible and proactive public finances," Takaichi has vowed to lower the country's debt-to-gross-domestic-product ratio by expanding the economy through investments in growth sectors.
In a move apparently aimed at addressing concerns about deteriorating finances, she has also pledged that the proposed two-year break on consumption tax on food and beverages will be implemented without issuing deficit-covering bonds.
As of the end of December, the state's debt consisted of 1,197.64 trillion yen in government bonds, which includes 1,094.49 trillion yen for debt redemption and interest payments, in addition to 44.13 trillion yen in borrowing and 100.40 trillion yen in financing bills, according to the ministry.
Long-term borrowing costs have been trending higher amid market expectations that the Bank of Japan will continue raising interest rates, while concerns over Japan's fiscal health mount on the back of Takaichi's vow for aggressive fiscal spending.
Swelling debt-servicing costs could also add pressure on the government to trim other spending, in areas such as social security, public works and education.
© KYODO
8 Comments
Login to comment
Spitfire
The numbers are so mind boggling huge that I guess Sanae is thinking that a few more hundred trillion yen won’t make much more difference.
The only ones who have really benefited from this huge wastage are the foreign tourists.
They arrive in Japan and enjoy all of its shiny buildings and gleaming infrastructure not really knowing how much it has wrecked the economy and people’s bank accounts.
Yet still the spending goes on…..the ridiculous Maglev train a case in point and endless convoys of dump trucks just moving dirt from one public works project to the next and sometimes bring the same dirt back several years later when the locals have forgotten.
OhhEldenRing
So it’s 1.34 quadrillion yen. That’s a lot.
deanzaZZR
There are no real policy debates these days. Given this level of debt doubling military spending and promising expanded government spending is simply bonkers.
Spitfire
Did she have a straight face when she said this?
dbsaiya
This is one of the reasons she skipped out on the Sunday morning political talk show.. She claimed she hurt her hand but was seen press fleshing later that day. Vote LDP, you get LDP.
Namorada
That’s what I wanted to see.
No debates.
Just influencer politics and now heavy spending.
Agent_Neo
The Ministry of Finance always talks about debt, but why never shows the positive debt? In yen, it's 1,320 trillion yen.
Since it's in yen, it can be paid back easily if we ignore rising interest rates, right? lol
Having negative debt all the time doesn't lift the public's spirits.
Of course, they're probably doing it on purpose through the media.
I hope Prime Minister Takaichi doesn't listen to trivial things and instead implements proactive fiscal policy.
It wouldn't be a big deal if deficit bonds piled up by another $10 trillion.
P_C
this is the proverbial middle finger to younger generations. ooooopppppssss, sorry about that.