英文【高盛】日本经济分析：减税与债务可持续性（太田、田中）

The issue of government debt sustainability has been attracting attention in nJapan, not only due to the rise in long-term interest rates over the past two years, but also because discussions on consumption tax cuts are intensifying. In this report we first summarize how rising interest rates and tax cuts affect the sustainability of government debt, and then we analyze the impact of the proposed tax cuts currently under discussion on debt sustainability. Government debt sustainability can be defined as reducing the debt/GDP ratio, nor at least keeping it constant. The debt/GDP ratio can be lowered by (1) an increase in the primary surplus, and/or (2) a fall in interest rates (smaller interest payments), and (3) a rise in the nominal GDP growth rate. Unlike in Europe and the US, interest rates in Japan have remained low relative to rising nominal GDP growth, providing downward pressure on the debt/GDP ratio, which makes the risk of undermining debt sustainability small at this moment. Even if the primary deficit were to increase with short-term consumption tax nrate cuts, currently proposed by various political parties, this could be offset by the downward contribution from low interest rates (low interest payments) and high nominal GDP growth on the debt/GDP ratio. However, partly due to the BOJ’s quantitative easing which effectively lowered the duration of the consolidated government debt (i.e., debt held by the government and the BOJ), interest payments may start to accelerate soon. This makes it difficult to have a large tax cuts of 2% of GDP more than two years. However, ending the short-term tax cuts essentially means a tax increase, which nmay not be easy to implement as scheduled. Therefore, we need to consider the risk that tax cuts may become permanent, when analyzing the impact of tax cuts on the sustainability of government debt. Based on our various scenarios, we estimate that permanent tax cuts amounting to more than 1% of GDP would undermine the debt sustainability. If the government increases the defense budget to 3% of GDP, there would be virtually no room for permanent tax cuts. The scale of Japan’s government debt leads to faster increase in the debt/GDP nratio relative to international peers, in the case of interest rates rising faster than nominal GDP growth (i.e. surge in inflation or fiscal risk premium). We believe that lowering the debt/GDP ratio could become an important future policy goal for the government, to reduce such future risk. Tomohiro Ota +81(3)4587-9984 | tomohiro.ota@gs.com Goldman Sachs Japan Co., Ltd. Akira Otani +81(3)4587-9960 | akira.otani@gs.com Goldman Sachs Japan Co., Ltd. Yuriko Tanaka +81(3)4587-9964 | yuriko.tanaka@gs.com Goldman Sachs Japan Co., Ltd. Andrew Tilton +852-2978-1802 | andrew.tilton@gs.com Goldman Sachs (Asia) L.L.C.Japan Economics Analyst Tax Cuts and Debt Sustainability (Ota, Tanaka)10 June 2025 | 1:36PM JST Investors should consider this report as only a single factor in making their