JGB Interest Payment Cost Seen Growing 1.5 Times over 3 Years

Tokyo, Jan. 22 (Jiji Press)--Japanese government expenditures to pay interest on bonds are projected to reach 16.1 trillion yen in fiscal 2028, 1.5 times higher than in fiscal 2025, according to Finance Ministry estimates based on the government’s fiscal 2025 budget plan.

The increase in interest payments, which reflects higher long-term interest rates following policy rate hikes by the Bank of Japan, is all but certain to narrow the range of policy choices available to the government.

The estimates showed that the government’s general-account expenditures will reach a record high of 127.8 trillion yen in the year beginning in April 2028, significantly growing from the 115.5 trillion yen earmarked in the fiscal 2025 budget despite its goal of reducing them to prepandemic levels.

Debt-servicing costs, which include principal repayments as well as interest payments, are seen totaling 35.3 trillion yen in fiscal 2028, accounting for nearly 30 percent of overall spending.

Tax revenues are projected to rise to 88 trillion yen in fiscal 2028, up from 78.4 trillion yen estimated for fiscal 2025, as the ministry expects a faster rate of tax revenue increase from economic growth.

[Copyright The Jiji Press, Ltd.]