Communities Strain with Debt Over 200 Trillion Yen in 2004

The 2006 White Paper on Local Public Finance, submitted to the Japanese cabinet on March 9, 2006, touched on the local governments' accounts in fiscal 2004. According to the report, outstanding debt owed by local governments increased by about 3.1 trillion yen (U.S.$26 billion) from the previous year, to 201.4 trillion yen (U.S.$1.7 trillion). The paper highlighted local governments' needy circumstances, as they are bearing substantial financial burdens, with the 14-year trend showing a steady increase in local governments' outstanding debt minus reserve funds, with a further 2.0 percent increase to 139.5 trillion yen (U.S.$1.2 trillion).

The debt breakdown is as follows: outstanding local bonds amounted to 140.5 trillion yen (U.S.$1.2 trillion), up 1.8 percent; loans from special tax allocations were 32.8 trillion yen (U.S.$280 billion), up 3.1 percent; and corporate bonds amounted to 28 trillion yen (U.S.$239 billion), down 1.0 percent. About one trillion yen (U.S.$85 billion) was drawn from reserves to make up for revenue shortfalls, reducing the balance to 13 trillion yen (U.S.$111 billion), down 6.8 percent.

Having both declined continuously for 5 years, this year's revenues and expenditures were 93.4 trillion yen (U.S. $798 billion) and 91.2 trillion yen (U.S.$779 billion), respectively. This netted a 1.2 trillion yen (U.S.$10 billion) surplus, because this figure does not include financial income carried over to the next fiscal year. There were 26 prefectures and municipalities with net deficits (Osaka and 25 cities or towns), two less than the previous year.

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Posted: 2006/07/30 05:07:27 PM
Japanese version