The government has begun crafting a road map for the nation's fiscal rehabilitation — which Prime Minister Shinzo Abe promised to prepare by this summer when he made the decision last fall to postpone the second phase of the consumption tax hike by 18 months to April 2017. Abe says his administration is maintaining its goal of achieving a primary balance surplus in 2020 — though he denies ever making it an international commitment — by promoting growth through his "Abenomics" policies and boosting tax revenue.
But the latest estimates by the Cabinet Office show that Japan will still fall far short of the target even if its economy grows faster in the years to 2020 than it ever did over the past two decades. The figures indicate that fiscal reconstruction will be tough unless the government makes painful cuts to its spending, which hits a record ¥96.34 trillion in the fiscal 2015 general account budget.
The numbers tell the serious condition of Japan's fiscal health. Government debt reached ¥1,029.9 trillion at the end of last year — more than double the nation's nominal gross domestic product or roughly ¥8.1 million per capita — and it keep growing as the government continues to issue a massive amount of bonds each year to pay for expenses that far outnumber tax revenue. To put its fiscal house in order, the government needs to both cut expenses and boost revenue.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.