Japan’s debt-servicing costs are expected to total 20.24 trillion yen in fiscal 2005, up 2.67 trillion yen from the current fiscal year’s initial budget, Finance Ministry officials said Thursday.
The costs will thus top the 20 trillion yen mark for the first time since the fiscal 2000 budgetary request.
The figure is part of the 85.52 trillion yen in fiscal 2005 budgetary requests expected to be submitted by government ministries and agencies to the Finance Ministry by the end of the month, according to the officials.
Analysts say the expected rise in Japan’s debt-servicing costs, already among the highest among developed nations, is getting worse.
Officials attributed the rise mainly to an assumption that long-term interest rates will rise to 2.7 percent from the 2.5 percent assumed in the fiscal 2004 budgetary request.
The general-account budget for the year beginning April 2005 will rise 3.41 trillion yen from the initial budget for the current fiscal year, the officials said.
The Finance Ministry, which will draft the fiscal 2005 budget on the basis of the requests, plans to trim about 3 trillion yen from the requests to cap the general-account budget around the current fiscal year’s initial budget of 82.11 trillion yen.
The ministry will start the process of compiling the budget from September and will unveil the draft in December.
The ministry plans to cut spending requests in areas such as social security spending and subsidies to local governments.
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