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January 3, 2007


Indicators - Economy / Public Finance

E-4. General Government Debt Outstanding (As Percentage of GDP)

1.Current Values
157.5% (2003)

2.Current Points
(out of a perfect score of 100 by 2050) 0 points
Calculation method:
(Current value - minimum value) / (2050 target value - minimum value) x 100

3. Explanation of Indicator
Japan is dependent upon government debt for 40% of its revenue. The amount of debt outstanding is conspicuously high even for an advanced nation, and it increases year after year. If this situation persists, future generations will only get the debt rather than sustainably inherit the economic abundance that the present generation enjoys; this would do great harm to sustainability. This scale of this issue is not one on which individual citizens can work together to solve; it requires debate and choices on the national level. In order to make comparison with other countries easier we are using a percentage of GDP as the numerical value.

4.Target for 2050

5.Ideal for the Future

6. Rationale for Ideal and Target Values
Japan's outstanding debt, with its rapid rate of increase, is reaching an unprecedented magnitude. Japan must await the deliberations of the experts as to what direction we should be taking for the future. On the subject of national financial matters we looked at the standard the Maastricht Treaty set as a condition for participation in the Euro, which was that government debt outstanding should be under 60% of the GDP, and at the independent standard (public debts outstanding to be under 40% of the GDP) laid down in one of Great Britain's "Sustainability Rules" for restoring fiscal soundness. We decided that our target for 2050 would be the "under 40% of GDP" set by Great Britain. Also, with the perspective that countries without any debt at all would the soundest, we chose 0% as our ideal.

7. Source
Japanese Ministry of Finance, International Comparison of Debt Outstanding (as percentage of GDP)(Japanese only)


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