By Ambrose Evans-Pritchard
Japans’s tax revenues have collapsed by 27pc over the last year, leaving it unclear how the incoming Democrats can pay for their blitz on welfare spending without flooding the debt markets.
The International Monetary Fund already expects Japan’s budget deficit to top 10pc of GDP this year and next. Gross public debt will reach 215pc of GDP in 2009, the highest in the world. “Japan faces a very difficult fiscal situation,” said the Fund in its latest country report.
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