Japan Seen Logging 800-B.-Yen Primary Balance Deficit in FY 2026

Tokyo, Jan. 22 (Jiji Press)--Japan is expected to post a primary budget deficit of about 800 billion yen in fiscal 2026, a government estimate showed Thursday.

The estimate for the primary budget balance at the central and local governments in the year that starts in April was presented to the day's meeting of the Council on Economic and Fiscal Policy, chaired by Prime Minister Sanae Takaichi.

The forecast worsened from a surplus of about 3.6 trillion yen presented in August 2025 because the implementation of the central government's fiscal 2025 supplementary budget, the largest since the end of the COVID-19 pandemic, is slated to be delayed into the coming fiscal year.

As a result, the country will aim to reach its target of achieving a primary budget surplus in fiscal 2027, later than the current goal of fiscal 2025-2026.

Takaichi, who advocates a "responsible and proactive" fiscal policy, said at the meeting that her administration will check the primary balance over several fiscal years instead of doing so on a single-year basis. She instructed council members to review the primary balance target ahead of the compilation of the government's new basic economic and fiscal policy guidelines around the middle of this year.

[Copyright The Jiji Press, Ltd.]