In fiscal 2006, the government will issue under 30 trillion yen in bonds for the first time in eight years, leaving the nation 11.2 trillion yen short of achieving a primary balance -- the condition where expenditures, excluding interest payments and debt redemptions, are covered by revenues excluding bonds.
This is a major improvement from fiscal 2003, when the state fell 19.8 trillion yen short of a primary balance. In addition to recent efforts to make government expenditures more efficient, tax revenue has expanded, thanks to the economic recovery.
Still, Japan's fiscal health remains in dire straits, and achieving the government's goal of a surplus in the primary balance by the early 2010s will not be an easy task.