TOKYO (Reuters) – Japan’s Ministry of Finance is set to seek about $242 billion in debt servicing for the fiscal year from next April 1, up for a third straight year on a budget-request basis, a ministry draft reviewed by Reuters showed.

The budget request for debt redemption and interest payments would total 25.4934 trillion yen ($242.03 billion), marking a 9.2% increase from the current fiscal year ending in March, according to the draft, which was confirmed by several sources with direct knowledge of the matter.

It would exceed 25 trillion yen on initial budget basis for the first time in five years, underscoring a struggle for the heavily indebted government to finance snowballing debt that tops twice the size of Japan’s $5 trillion economy.

In compiling its budget request, the ministry estimated interest rates at 1.2% thanks to the Bank of Japan’s ultra-low rate policy. Still, massive outstanding debt