Japan’s new prime minister needs to set a fresh fiscal consolidation target once the nation balances its budget, according to government adviser Takero Doi.
As an option, the government might consider setting a budget surplus-to-gross domestic product target to ensure that the nation stays in the black, according to Doi, an economics professor at Keio University and a member of an advisory panel to the Finance Ministry. Such a goal would help bring down Japan’s public debt-to-GDP ratio, he said in an interview last week.
The primary balance, which is the difference between government revenue and expenditure excluding net interest payments on debt, is projected to turn positive in the year starting in fiscal 2025 after multiple delays, according to the Cabinet Office.
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