A flurry of big spending packages and ballooning social welfare costs for a rapidly ageing population have left Japan with a debt pile 263% the size of its economy - double the ratio for the United States and the highest among major economies.
Japan's public debt is more than double its annual economic output, by far the heaviest burden in the industrialized world.
Japan is the second-largest foreign holder of U. S. debt after China, with holdings totaling nearly $1. 3 trillion in September 2020. Japan's large holdings of U. S. debt can be attributed to Japan's large trade surplus, low-interest rates, and limited investment opportunities in their own domestic markets.
Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.
As of the end of 2021, debt per adult in Japan amounted to approximately 29.2 thousand U.S. dollars.
As of December 2022, the Japanese public debt is estimated to be approximately 9.8 trillion US Dollars (1.29 quadrillion yen), or 263% of GDP, and is the highest of any developed nation. 43.3% of this debt is held by the Bank of Japan.
“The main reason behind the revised GDP numbers is a downward revision in consumption,” said Wakaba Kobayashi, an economist at Daiwa Institute of Research. “With the eighth wave of Covid-19 happening then, the pace of consumer recovery wasn't that strong.”
The yen would collapse, and the country would have trouble paying for food and energy, most of which is imported. In short, debt default would lead to chaos. Japan's political system is notoriously weak and an economic collapse would sweep away the regime that has been in place since 1945.
Government price controls, an ageing population and negative interest rates are among the factors keeping down inflation in Japan.
Who owns China debt? Most of China's local government debt, one of the most regular issuers of domestic debt, is held by state-owned or state-controlled financial institutions. For decades, China's local governments have relied on off balance sheet borrowing through local government financing vehicles (LGFVs).
Japan and China have been the largest foreign holders of US debt for the last two decades. Japan and China held almost 50% of all foreign-owned US debt between 2004 and 2006. However, this has declined over time, and as of 2022 they controlled approximately 25% of foreign-owned debt.
Japan - Debt: 221.32% of GDP
Japan's debt-to-GDP ratio is the highest in the world due to a prolonged period of economic stagnation and demographic challenges.
Reparations amounting to US$200 million (72 billion yen) were made to Burma, and US$223.08 million (80.3088 billion yen) to Indonesia. The Soviet Union waived its rights to reparations from Japan, and both Japan and the Soviet Union waived all reparations claims arising from war.
Under Japanese law, when a person dies, the heirs inherit all the rights and obligations of the deceased. Simply put, “obligations” means “debts”, and therefore can also be inherited.
If Japan does not surrender, bombs will have to be dropped on her war industries and, unfortunately, thousands of civilian lives will be lost.
In terms of mean wealth, the average Australian adult had US$550,110 in 2021 after seeing an annual increase of US$66,350 in their net worth. This put Australia at number four in the world, after Switzerland, the United States and Hong Kong.
Australia has a GDP per capita of $48,700 as of 2020, while in Japan, the GDP per capita is $41,400 as of 2019.
Weaknesses: A decline in birth rate and hike in aging population leads to economic debt. Japan has far too many people for its little island. Most populations congregate in major cities, like Tokyo, because much of the island is inhabitable.
Consumption and DX Investments to Enable Continuing Growth
In the December forecast, GDP is predicted to grow an average of 1.07% in fiscal 2023. After slumping 4.1% in fiscal 2020 due to the COVID-19 pandemic, real GDP turned to increase 2.5% in fiscal 2021 and is anticipated to grow 1.65% in fiscal 2022.
Japan's population structure was shifting and becoming increasingly elderly. Aging meant slower growth of the labor force. Declining fertility combined with aging eventually reduced the domestic saving that supported economic expansion during the rapid economic growth period.