Japan will likely issue an additional ¥10.8 trillion in bonds in fiscal 2009, bringing total new bond issuance to a record of ¥44 trillion, sources said Saturday.
This means total new bonds issued this year may exceed tax revenues for the first time since fiscal 1965, when Japan started resuming sovereign bond issuance after the war, the government sources said.
The money from the bonds will be used to finance the latest economic stimulus package, which involves actual public spending of ¥15.4 trillion.
The package, announced earlier this month, is partly designed to create 400,000 to 500,000 jobs by March 2010.
The additional bonds will include construction bonds worth ¥7.3 trillion and deficit-covering bonds worth ¥3.5 trillion, they said.
In the initial budget for fiscal 2009, the government set new bond issuance at just ¥3.29 trillion. But the additional ¥10.8 trillion will take total new bond issuance this year to over ¥44 trillion, shattering the previous record of ¥37.5 trillion set in fiscal 1999.
The government expects tax revenues to come to ¥46.1 trillion in the initial budget for fiscal 2009, but that may drop by ¥4 trillion to ¥5 trillion because of the rapid drop in corporate earnings, the sources said.
As other financial sources for the new stimulus package, the government will secure ¥3.1 trillion by tapping a special account budget under the fiscal investment and loan program, also known as "zaito," and ¥850 billion from special emergency reserves set aside in the fiscal 2009 principal budget, the sources said.