Japanese PM Abe reaffirmed the target of achieving a primary budget surplus in five years at the Council on Economic and Fiscal Policy meeting yesterday
- Nongovernment members of the Council say this require Japan to shrink its current deficit by an annual 2.5 trillion yen ($21 billion) through a combination of economic growth and spending cuts
- But no specific reductions have been proposed from the government
The council's four nongovernment members (they incldue include the head of the Keidanren business lobby) issued their own broad recommendations for turning a primary deficit into a surplus
- First, the 8% consumption tax must rise to 10% in April 2017, as Abe intends. This will improve the budget situation in primary terms by nearly 1% of gross domestic product
- In addition, 2.5 trillion yen, or 0.5% of GDP, must be trimmed from the primary deficit each year for five years, the quartet argued.
More at the Nikkei: Japan must maintain $21B pace to hit surplus target: advisers
