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TOKYO, Aug 25 (Reuters) – Japan’s finance ministry expects debt-servicing costs to rise 17% to a record \u200c36.64 trillion yen ($230 billion) in the next \u200cfiscal year, adding to pressure on the country’s already tattered finances, \u200bKyodo News reported on Tuesday. <\/p>\n
The increase reflects plans to set the assumed interest rate for calculating debt servicing costs at a 29-year high of 3.8% in its \u200cbudget request for \u2060next fiscal year. <\/p>\n
The total value of budget requests from government ministries and agencies for \u2060fiscal 2027 is expected to exceed 130 trillion yen for the first time, up sharply from about 122 \u200btrillion yen \u200bin the current fiscal \u200byear, according to Kyodo. <\/p>\n
The \u200csurge is being driven largely by Prime Minister Sanae Takaichi’s push for a more expansionary fiscal policy, including a public investment scheme that allows ministries to seek funding without a preset cap. <\/p>\n
The government also plans \u200cto incorporate into the initial budget \u200bspending that in recent years \u200bwas often financed \u200bthrough supplementary budgets, a move that could \u200cfurther inflate headline expenditure. <\/p>\n
The government \u200bwill finalise \u200bbudget requests at the end of this month before the finance ministry reviews them and compiles \u200ba draft budget, \u200cwhich is expected to be approved by the \u200bcabinet at year-end. <\/p>\n
($1 = 159.4700 yen) <\/p>\n
(Reporting by Makiko \u200bYamazaki; Editing by Christian Schmollinger) <\/p>\n<\/p><\/div>\n