Fiscal Structure - Japan's fiscal system is divided into central and local levels, with the central government budget comprising three main accounts: general account, special account, and government-related institutions[5] - The general account is the core of Japan's fiscal operations, with 70% of its revenue from taxes and 30% from government bonds, focusing on social security and debt servicing[27] - Special accounts, which are over three times the size of the general account, are dedicated to specific purposes such as debt management and pension systems[6] Debt and Deficit Management - Japan has the highest debt level globally, with a central government leverage ratio exceeding 160%[7] - The deficit rate is projected to narrow to approximately 2.4% in the fiscal year 2026, driven by economic growth and inflation[7] - The government is adjusting the structure of bond issuance to alleviate debt pressure, shortening the average maturity of bonds to reduce long-term financing costs[7] Revenue and Expenditure - For the fiscal year 2024, the general account revenue is estimated at 135.98 trillion yen, with expenditures at 123.02 trillion yen, indicating a balanced approach to fiscal management[17] - Tax revenue is expected to increase to 83.74 trillion yen by 2026, accounting for 68.5% of the general account revenue[29] - Social security expenditures are projected to rise to 39.06 trillion yen by 2026, representing 31.9% of total expenditures[37] Special Accounts and Their Role - Special accounts are crucial for managing specific funds, with the national debt management fund accounting for over 50% of special account revenues and expenditures[45] - The special account for pension systems is significant, with a projected revenue of 434.4 trillion yen in fiscal year 2025, focusing on targeted financial management[42]