October 03, 2013

Japan would need a fiscal consolidation of 13 percentage points of GDP to stabliize its current debt

"As for Japan, merely stabilising its debt to GDP ratio would take a fiscal consolidation in the order of 13 percentage points of GDP. While Japan has so far avoided the crunch by relying on high domestic savings, those will diminish rapidly as the population ages. But foreign investors, faced with debt ot GDP ratios of more than 200 per cent, would likely demand far higher interest rates than Japanese governments have paid to date, potentially strangling economic growth" 

 Source: It ain't over yet: global financial crisis lingers on 
By Henry Ergas 
The Weekend Australian 
September 28-29, 2013, page 16

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