tokyo jan 19 reuters  japans debt servicing costs would exceed 30 trillion yen 26155 billion for the first time ever in fiscal 2025 if interest rates rise by 1 more than expected a draft of the ministry of finances mof estimates due later this month showed the mof in its annual estimates over a fiveyear period projected debt servicing costs worth 243 trillion yen for the next fiscal year would hit 288 trillion yen in fiscal 2025 assuming interest rates at 13 the estimated amount to be presented at the lower house budget committee for debate on the state budget would rise to 325 trillion yen in fiscal 2025 if interest rates rose to 23 it would reach 363 trillion yen assuming interest rates at 33 straining spending needed for policyrelated areas such as education defence and public works the latest estimates would bring home the benefit of the bank of japans boj powerful monetary easing which has effectively served to bankroll public debt roughly twice the size of japans 5 trillion economy despite the debt pile japans government can spend away massive stimulus as the bojs ultralow rates policy keeps borrowing costs at rockbottom in japan years of massive fiscal stimulus have left infrastructure that is rarely used in rural areas a debt pile and debtservicing costs now accounting for a quarter of this years state budget worth a record 1076 trillion yen with an expected nominal growth rate at 3 the fiscal 2025 budget would rise to a record 1116 trillion yen tax revenue would reach a record 721 trillion nontax incomes at 56 trillion yen and new government debt would be lower at 339 trillion yen the increase in debtservicing costs would slightly exceed that of government spending given rounds of covid19related debt issuance over the past two years