Japanese national debt has passed the one quadrillion yen mark – increasing 1.7 per cent to 1,008,600,000,000,000 yen (£6.730 trillion). This is larger than the economies of the UK, Germany and France combined and is about 230 per cent of GDP.
Earlier this week, the International Monetary Fund called on Japan to adopt a “credible” fiscal plan to wind down its debt. Prime minister Shinzo Abe is currently mulling one of the recommendations, which is to double the sales tax rate to ten per cent by 2015.
Even if it raises the tax, Japan will still run a primary budget deficit equivalent to two per cent of the economy in the fiscal year starting April 2020, the Cabinet Office said yesterday.
Social welfare benefits in Japan have more than doubled in the decade to 2010, from 47 trillion yen in 1990 to 103 trillion yen, according to the National Institute of Population and Social Security Research.