Tokyo Metropolitan Government

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations Strong tax revenue base as the economic center of Japan High level of tax revenue supported by moderate domestic economic growth Fiscal discipline evident in strong record of revenue and expenditure management Continued moderate decrease in debt, led by positive fiscal balance Sovereign rating constrains Japan's local and regional governments (LRGs) Exceptional liquidity as reserves accumulate and debt declines We expect TMG's expenditure to rise because it has been proceeding with sustainability measures related to matters such as a falling birthrate and strengthening urban infrastructure under inflation. Nevertheless, we anticipate TMG's fiscal surplus after capital accounts will remain slightly positive, as its tax revenue will

...S&P Global Ratings believes Tokyo Metropolitan Government's (TMG) fiscal balance will remain positive for the next two years despite a likely increase in expenditure on priorities. We expect TMG's expenditure to rise because it has been proceeding with sustainability measures related to matters such as a falling birthrate and strengthening urban infrastructure under inflation. Nevertheless, we anticipate TMG's fiscal surplus after capital accounts will remain slightly positive, as its tax revenue will remain high. We base this on our assumption that the domestic economy will continue to grow moderately for the next two years....

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