Japanese government debt rose ¥101.92 trillion ($940 billion) in fiscal 2020 to a record ¥1.2 quadrillion, showing the largest annual increase as a result of the fiscal response to the coronavirus pandemic, according to the Finance Ministry.
Marking a record high for the fifth straight year, the outstanding balance as of March 31 means that debt per capita stood at ¥9.70 million based on the estimated population of 125.41 million on April 1.
The ballooning debt figure, released Monday, put the world’s third-largest economy further away from restoring its fiscal health, which remains the worst among major economies with debt twice the size of gross domestic product.
The previous record annual debt increase was ¥78.40 trillion in fiscal 2004.
The nation’s debt consisted of ¥1 trillion in bonds, ¥52 trillion in loans from financial institutions and ¥90.3 trillion in financing bills or short-term notes of up to one year, according to the ministry.
Since the coronavirus began to spread across the country in spring last year, the government has been implementing fiscal measures on an unprecedented scale to support the economy and the medical system, with three extra budgets worth about ¥73 trillion in total enacted for fiscal 2020.
Government debt issued in the fiscal year through March swelled to ¥112.55 trillion from the initially planned ¥32.56 trillion, financing the supplementary budgets and making up for a decline in tax revenue.
The country’s GDP shrank an annualized real 29.3% in the April-June period of 2020 from the previous quarter, its worst contraction on record, as the government declared its first coronavirus state of emergency in April and kept it until late May with stay-at-home and business suspension requests.
Prior to the pandemic, Japan’s public debt had been growing as a rapidly graying population led to ballooning health care and pension costs. As for fiscal 2021, ¥43.6 trillion of new bonds will be issued to help finance a ¥106.61 trillion initial budget including ¥35.84 trillion for social security costs.
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