Japan eyes smaller FY 2025 deficit, primary balance goal unattained

Japan expects a smaller-than-projected primary balance deficit of 1.3 trillion yen ($9 billion) in fiscal 2025 due to increased tax revenue, though returning to a surplus will likely not come until a year later than the country’s stated goal, the government said Tuesday.

The updated estimate, based on a more optimistic economic growth scenario, still underscores the daunting challenge of restoring the country’s fiscal health, the worst among advanced economies, as Prime Minister Fumio Kishida aims to sharply increase spending on defense and child care.

The projected fiscal 2025 deficit in the ...