Japan Seen Achieving Primary Surplus in FY 2026: Cabinet Office

Politics

Tokyo, Jan. 14 (Jiji Press)--Japan's central and local governments are expected to achieve a combined primary budget surplus in fiscal 2026, one year earlier than projected in July 2021, thanks to higher tax revenue backed by a recovery of corporate earnings, the Cabinet Office said Friday.

The new estimate, submitted to the day's meeting of the government's Council on Economic and Fiscal Policy, chaired by Prime Minister Fumio Kishida, is based on the scenario that the country will continue to post high nominal economic growth of over 3 pct.

A primary budget surplus means that spending other than debt-servicing costs is covered without relying on new debt issuance.

In fiscal 2025, the target year set by the national government for turning around the primary budget balance, Japan will see the balance result in a deficit of some 1.7 trillion yen, according to the new projection.

If continued spending reforms, such as curbing social security costs, which are expected to improve the primary balance by about 1.3 trillion yen a year, are taken into account, the balance will end in a surplus of 2.2 trillion yen in fiscal 2025, according to the Cabinet Office.

[Copyright The Jiji Press, Ltd.]

Jiji Press