The national debt will probably swell to ¥973 trillion by the end of fiscal 2010, according to the Finance Ministry.
The debt, which includes bonds and financial bills, will expand 8 percent from the current fiscal year ending March 31, according to documents the ministry submitted to the Diet on Monday.
The yield on the benchmark 10-year bond rose after the report showed falling revenues and more spending are exacerbating the country’s debt burden, already the world’s largest.
Finance Minister Naoto Kan, who took office this month, has said spending is needed to support the economy while also noting the government needs to maintain the trust of bond investors to prevent a surge in borrowing costs.
Japan, with a shrinking population and entrenched deflation, may see its debt burden jump to 246 percent of gross domestic product by 2014, according to the International Monetary Fund.
Government liabilities will swell to ¥900 trillion in the year ending in March, the report said.
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