Japan’s debt servicing cost would exceed 30 trillion yen for fist time ever in 2025 if interest rate rises by 1% more than expected, a draft of the Ministry of Finance’s (MOF) estimates which is due later this month.
The MOF in its annual estimates over a period of five years projected debt servicing costs worth 24.3 trillion yen for the next fiscal year expected to reach 28.8 trillion in fiscal year 2025 with the assumption of interest rate at 1.3%.
The estimated amount is to be placed before the lower house budget committee for debt would rise to 32.5 trillion yen in fiscal year 2025 if interest rates rose to 2.3%. The figure is expected to reach 36.3 trillion yen assuming interest rates at 3.3% which would strain spending on education, defense and public works.
