Japan Panel Warns Govt against Fiscal Optimism
Tokyo, Nov. 25 (Jiji Press)--A panel advising Japan's finance minister on Monday stressed the importance of fiscal reconstruction, saying that the government should not "feel complacent" amid the current low interest rate environment in the country.
The Fiscal System Council made the point in a set of proposals regarding the government's coming work to draft its budget for fiscal 2020, which starts next April.
Sadayuki Sakakibara, chairman of the council and former head of the Japan Business Federation (Keidanren), the country's most influential business lobby, submitted the proposals to Finance Minister Taro Aso the same day.
The very low domestic interest rates, reflecting the Bank of Japan's ultraeasy monetary policy, help the state curb interest payments on Japanese government bonds and work to prevent its debts from increasing sharply as a result.
But the council said, "The state can reap benefits of low interest rates only if it gains credibility in its fiscal condition," calling on the government to stick to its goal of turning around the country's primary budget balance in fiscal 2025 even on the assumption that the low rate environment would continue.
[Copyright The Jiji Press, Ltd.]