Official data have show Japan's debt mountain has reached an alarming new record. The news came shortly after the government's announcement of a two-year budget-slashing program aimed at easing the situation.
Japan's national debt surpassed the one-quadrillion-yen threshold, the government reported Friday. It marked a new record and underlined Tokyo's daunting struggle to come to terms with its public debt load.
The figure, supplied by the Finance Ministry of 1.008 quadrillion yen ($10.42 trillion, 7.78 trillion euros) for the end of June, highlighted Japan's dubious distinction of proportionately having the biggest debt pile among all industrialized nations, equaling more than twice the size of its gross domestic product (GDP).
The staggering June figure was another 1.7 percent higher than in the previous quarter. The crisis in Japan differs than that in the eurozone as most of its low-interest debt is held domestically rather than by international creditors.
Tokyo move closely watched
Nonetheless, the Japanese government appeared highly alarmed by recent developments. A day earlier, it pledged to cut $83 billion out of its budget between April 2014 and March 2016. If implemented, the move would amount to an average reduction of more than 4 percent of current annual spending.
"It's extremely important for the government to clarify the path of fiscal rehabilitation and to move ahead with fiscal and structural reforms," Bank of Japan chief Haruhiko Kuroda said after a two-day policy meeting.
Calls for speedy budget consolidation had also come from the International Monetary Fund (IMF) which urged the country to adopt a credible plan to repair its books, including raising sales taxes to generate fresh revenue.
hg/hc (AFP, AP)