TOKYO (MNI) – Japan said on Tuesday that the combined primary
budget deficit for the central and regional governments is estimated to
total Y16.8 trillion in fiscal 2015, or 3.3% of nominal GDP, even with a
proposed sales tax hike to 10% from the current 5%.
This indicates Japan will not be able to meet its target that the
primary fiscal deficit — the budget deficit excluding debt-servicing
costs from expenditures and bond issuance income from revenues — should
be halved to 3.2% of GDP by fiscal 2015 from the fiscal 2010 level.
The latest projection is based on the assumption that nominal GDP
will rise an average of 1.5% to 1.9% in a period up to fiscal 2020, and
the consumption (sales) tax rate will be raised to 8% on April 1, 2014
and to 10% on Oct. 1, 2015.
The primary budget deficit is estimated to total Y16.6 trillion in
fiscal 2020, or 3.0% of nominal GDP, indicating Japan will not be able
to meet its goal to balance its primary budget by that year.
The outstanding balance of public debt issued by both the central
and regional governments is expected to total Y984.4 trillion (193.1% of
nominal GDP) in fiscal 2015 and Y1,164.1 trillion (208.6%) in fiscal
2020, the government estimates.
In a more optimistic scenario, Japan’s primary deficit would be
limited to 2.6% of nominal GDP in fiscal 2015 and to 1.4% in fiscal
2020, if nominal GDP grew at around 3% each year.
tokyo@marketnews.com
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[TOPICS: M$J$$$,M$A$$$,MGJ$$$]
