SOG Magazine: By the end of September last year, Japan was in debt to a level that is surprising to hear and what is surprising is that this debt burden will not stop here but will continue to increase in the future.
Japan’s total debt has reached 9.2 trillion US dollars, which is 266 percent of Japan’s GDP, the highest amount of debt among the world’s major economies.
If we look at the size of US debt compared to Japan, it is 31 trillion dollars, but this amount is equal to only 98% of the total GDP of the US.
The journey of reaching such a large amount of debt is not a few years, but it has taken many decades to increase the burden of loans taken in the struggle to keep the country’s economy running and meet the expenses.
Businesses, which play a key role in Japan’s civic and economic development, are reluctant to borrow while the state often forces them to spend.
Takeshi Tashiro, a non-resident senior fellow at the Patterson Institute for International Economics, says people save a lot on their own but don’t tend to invest in the market in comparison.
According to him, one of the main reasons for this problem is the aging of the population in Japan, which increases the government’s spending on social security and health services.
Most of Japan’s population faces a lot of uncertainty about their future after retirement and therefore prefer personal savings.
However, despite this large volume of debt, what is surprising is that international investors trust Japan to invest.
Japan’s debt burden began to rise in the early 1990s when its financial and real estate systems burst like a bubble with disastrous results, and Japan’s debt-to-GDP ratio at that time. It was equal to only 39 percent share.
Due to this situation, the government’s income decreased while on the other hand, the expenses started to increase. Multiplied.
