Japan Widens FY2020 Primary Balance Deficit Estimate to ¥10.8 Trillion (News)
Tokyo, Jan. 23 (Jiji Press)—The Japanese government released on Tuesday new estimates on fiscal conditions showing that the combined primary budget balance for the central and local governments will log a deficit of at least ¥10.8 trillion in fiscal 2020, wider than the previous deficit projection of ¥8.2 trillion made in July last year.
The expanded deficit projection was contained in new medium- to long-term economic and fiscal estimates submitted by the Cabinet Office at the day's meeting of the Council on Economic and Fiscal Policy, chaired by Prime Minister Abe Shinzō.
The government revised down the deficit figure given criticism that the July estimate was too optimistic, by adopting what it claims to be a realistic economic growth scenario.
The larger deficit projection is also because the government has changed the purpose of the planned October 2019 consumption tax hike from debt reduction to additional child care support, in line with Abe's pledge in the October 2017 general election.
Based on the new estimates, which do not reflect possible social security and other reforms, the government will be able to achieve a primary budget surplus in fiscal 2027, two years later than previously expected, failing to meet its existing target of making it by fiscal 2020.[Copyright The Jiji Press, Ltd.]