Japan

Has the highest government debt among large economies, mostly owned at home, including by the Bank of Japan. Years of near-zero interest rates kept its cost low; rising rates are changing that.

Currency: Yen · Central bank: Bank of Japan · Economy: about $4.3tn

1 · Government finances

How much it owes, and what it costs

Government debt in Japan is about 199% of GDP this year, on IMF estimates, 7 points lower than in 2019. The government is running a deficit of 1.4% of GDP: even before paying 0.3% of GDP in interest, it spends more than it collects. The IMF expects debt to fall to about 189% by 2031.

Measure	2019	2025	2026IMF estimate	2031IMF forecast
Government debt% of GDP, gross	206.3%	204.8%	199.4%	188.9%
Budget balance% of GDP, minus = deficit	−3.0%	−0.7%	−1.4%	−4.0%
Primary balancebudget before interest	−2.4%	−0.5%	−1.2%	−2.1%
Interest cost% of GDP, net	0.7%	0.2%	0.3%	1.9%

Credit ratings

A+S&P

A1Moody’s

AFitch

Long-term foreign-currency ratings, checked 25 October 2026. AAA is the highest grade; below BBB− is “high yield”.

2 · External position

What it earns and spends abroad

Japan runs a current account surplus of 4.6% of GDP (about $199bn): it earns more from the rest of the world than it spends there, and lends the difference abroad.

Measure	2019	2025	2026IMF estimate	2007–26
Current account% of GDP	+3.4%	+4.9%	+4.6%
Current accountUS$ billions	+176	+217	+199

3 · Economy and markets

Growth, prices and borrowing costs

The IMF expects the economy to grow 0.7% this year in real terms, with inflation averaging 2.0%. Its 10-year borrowing cost, 2.96%, is above the economy’s nominal growth of roughly 2.7% (growth plus inflation). Over time, that makes debt harder to keep stable relative to GDP.

1.25%Policy rate · BoJ policy rate
Oct 2026

2.96%10-year yield · 10-year JGB
Oct 2026

1.9%Inflation, latest month · Statistics Bureau of Japan
Aug 2026

158.0Exchange rate · Yen per US dollar
16 Oct 2026

Measure	2025	2026IMF estimate	2027IMF forecast
Growthreal GDP, %	1.2%	0.7%	0.7%
Inflationaverage for the year, %	3.2%	2.0%	2.6%
Unemployment% of workforce	2.5%	2.5%	2.5%

In the news

Japan in the news

Newest first.

24 Oct 2026Japan’s oil bill pushes its trade balance into deficit for a fifth monthThe April–September deficit reached ¥2.81tn ($17.8bn). Imports rose 20%, and the yen is near 157 to the dollar.Japan · External shock → trade & yen · Effect

Mechanics

The mechanics behind it

Mechanic 05How government debt grows or shrinks Mechanic 02Why some governments pay more to borrow Mechanic 04How exchange rates move prices and trade Mechanic 03How an oil shock travels through the economy

Concepts

Terms on this page

Debt-to-GDP ratio Budget deficit Primary balance Credit rating Current account Government bond

More countries

Other country profiles

United States Germany France Italy United Kingdom China India Singapore Brazil

Sources and notes

Government finances, current account, growth, inflation and unemployment: IMF World Economic Outlook and Fiscal Monitor, via the IMF DataMapper (checked 2026-10-24). The IMF publishes them in April and October.
2026 figures are IMF estimates, and later years are IMF forecasts. Earlier years are actual data, sometimes revised.
Debt is general government gross debt: central, regional and local government and social security. Interest cost is net interest, worked out as the primary balance minus the overall balance.
Credit ratings: long-term foreign-currency ratings from S&P Global, Moody’s and Fitch, checked on the date shown. Agencies can change them at any time.
Policy rates, 10-year yields, monthly inflation and exchange rates: as on The numbers page.