Japan’s national debt has hit a new record high, reaching 1,241 trillion yen, or about $9.55 trillion, in the fiscal year 2021, which ended in March, the Kyodo news agency reported on Tuesday citing data from the country’s Finance Ministry.
The country’s debt currently stands at approximately 266% of Japan’s annual GDP, up roughly $190 billion from the previous year.
Last year has become the eighteenth consecutive year when Japan’s debt has risen, and the sixth year in a row when it broke previous records.
National debt, or the so-called government’s long-term debt, comes from the government borrowing funds to make up for budget deficits when expenses exceed revenues. It eventually has to be repaid from collected taxes.
Nearly 90% of Japan’s debt comes from government bonds. Analysts say the build up of Japan’s debt has been brought about by problems within the Japanese social security system and the impact of the Covid-19 pandemic on the country’s economy.
According to Kyodo, the country’s fiscal health may get worse before it gets better, as Tokyo plans to issue new government bonds worth 36.9 trillion yen ($280 billion) to support the budget for the fiscal 2022.
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