Thursday, July 8, 2010

Japan Vulnerable to Debt Crisis in 5-10 Years

While the country's likely to manage funding its deficit in the short term because of the country's vast pool of domestic savings, that could change in the long run because of its rapidly aging population, economist Kenneth Rogoff told CNBC.

"The end game in Japan is really unclear -- their population is declining, they don't have an obvious way to replenish their workforce," Rogoff

"(People) are retiring and they want their money back. Pension funds are becoming net savers, where are they going to get more money?"

At 200 percent of its national gross domestic product, Japan's public debt is the highest among industrialized countries, reports CNBC.. And the IMF has warned that the debt could reach 250 percent of its GDP by 2015, if the government does not take serious measures to reduce it.

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