From an optimistic viewpoint, if the medium- to long-term growth expectations rise as a result of overcoming deflation, the fiscal structure remains solid despite a pick-up in nominal longterm rates. That is because tax revenue will increase as the nominal growth rate rises.
The elasticity of tax revenue is generally high at the initial phase of economic expansion, and corporate tax is likely to contribute to a higher revenue. On the expenditure side, the pace of increase in the government’s interest payment costs will remain subdued for some time.