Total outstanding bonds and borrowing reached a record ¥1,255.19 trillion (US$9.43 trillion), up ¥13.9 trillion from the previous quarter. Based on the government’s population estimate of 124.84 million as of July 1, this works out to 10.05 million yen per person – nearly double the fiscal 2003 figure.

Though tax revenue hit an all-time high of ¥67 trillion last fiscal year as corporate earnings recovered, this growth was outpaced by rising spending.

Low rates have helped to hold down the cost of interest payments, but Japan’s heavy reliance on debt means that a future rise in interest rates could prove painful.

Outstanding long-term debt, which must be repaid from tax revenue, dipped to ¥1,010.42 trillion – ¥6.7 trillion less than at the end of March – owing largely to repayments of previously issued bonds.

Japan’s ¥2.7 trillion fiscal 2022 supplementary budget passed in May to combat rising prices was funded entirely through deficit-covering bonds. The finance ministry estimates the outstanding balance of general bonds will reach ¥1,029 trillion at the end of fiscal 2022, while total borrowing grows to ¥1,411 trillion.

Major Western economies also are spending heavily to rein in the pandemic and inflation, but Japan’s debt load remains an outlier at more than twice the country’s gross domestic product.