Asia-Pacific

Minister warns of Japan's excessive dependence on debt

(Xinhua)
Updated: 2011-01-24 17:30

Japan's Finance Minister Yoshihiko Noda makes a speech at the start of a regular parliament session in the lower house of parliament in Tokyo Jan 24, 2011. [Photo/Agencies]

TOKYO - Japanese Finance Minister Yoshihiko Noda warned Monday that it is no longer possible for the government to excessively depend on debt to manage the country's finances.

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In a speech at the Diet, Noda said: "to ensure sustainable development, we must strongly press for economic growth, fiscal restoration and social security reform."

Japan's gross debt of the central and regional governments is expected to reach 184 percent of gross domestic product in March 2012, the worst level among major developed economies, he said.

The finance minister also urges the Diet to swiftly pass the draft budget for the next fiscal year.

"It is essential to pass the fiscal 2011 budget within the current year (ending March) in order to immediately implement the policies directly linked to people's lives," he said.

He warned of the challenges of deflation and falling birthrates the Japanese economy is faced with, but said that Japan could show to the world how a new economic society should be "if we created a path toward a solution."

Also on Monday, Economic and Fiscal Policy Minister Kaoru Yosano indicated a rise the consumption tax to improve the country 's deteriorating public finances.

In his speech at the Diet, Yosano stressed the need for tax reform, with a possible raise of the politically sensitive sales tax from the current 5 percent.