Japan is set to miss its long-standing goal of balancing its primary balance in the year from April 2025, according to the government’s own forecasts.
Japan’s primary balance, which excludes net interest payments on public debt, is projected to be around minus 0.4% in fiscal year 2025, according to the Cabinet Office’s mid-to-long term outlook report released Monday. The estimated deficit was unchanged from the last update in July.
The new figure will add to doubts about the government’s ability to bring its fiscal house in order. Setting a path toward greater fiscal discipline is seen of key importance for maintaining market confidence in the nation’s finances. Japan’s public debt load, at more than twice the size of the economy, is the largest among advanced economies.