Japan’s public debt hits record 1 trillion yen as leaders struggle to correct spending path

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Long-term Japanese government debt hit a record 1 quadrillion yen (about $7.6 trillion) for the first time ever.

Japan hit record debt in fiscal year 2021, which ended in March, according to Japan’s finance ministry. Japan’s debt currently sits at around 266% of its annual GDP, making a quick turnaround unlikely.

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This is the eighteenth consecutive year that the Japanese government’s long-term debt has increased, and the sixth consecutive year of record debt totals.

The accumulation of debt is a symptom of increased strain on Japan’s social security system and costly COVID-19-related spending at the height of the pandemic, as well as aggressive banking policies in Japan.

People stand in front of an electronic stock chart of a securities company in Tokyo on Monday.
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People stand in front of an electronic stock chart of a securities company in Tokyo on Monday.
(AP/Koji Sashara)

Japan’s economic woes are compounded by an aging workforce and a sluggish job market. The country has struggled to create quality jobs and has relied on additional migrant foreign labor for low-skilled positions.

With one of the lowest birth rates in the world, the Japanese government has put in place a variety of high-value incentives for young couples to have children. Government benefits for parents include financial assistance checks for each child and generously subsidized tuition.

Britain's Prime Minister Boris Johnson, left, greets Japanese Prime Minister Fumio Kishida before they meet at 10 Downing Street in London, Thursday, May 5, 2022.

Britain’s Prime Minister Boris Johnson, left, greets Japanese Prime Minister Fumio Kishida before they meet at 10 Downing Street in London, Thursday, May 5, 2022.
(AP Photo/Matt Dunham)

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Due to significant threats from China against neighboring Taiwan and North Korean threats of missile strikes, conflicts with potentially hostile nations have also gripped Japanese politics.

Japanese Prime Minister Fumio Kishida met Pope Francis for a private conversation last week, the same day a ballistic missile was fired into the Sea of ​​Japan.

World leaders met for about half an hour in the Vatican, spending the majority of their time discussing the proliferation of nuclear weapons. Pope Francis, a staunch opponent of nuclear weapons, has previously expressed sympathy for the island nation’s history with the issue. The meeting also marked the important milestone of 80 years between Japan and the Holy See.

“During the cordial talks at the Secretariat of State, satisfaction was expressed with the bilateral collaboration, referring to the 80th anniversary of diplomatic relations. In this context, the contribution of the Catholic Church in many sectors of Japanese society has been noted and appreciated,” the Holy See said in a statement.

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