Japan would need ¥6.6 trillion more in tax revenue to achieve a primary balance surplus in fiscal 2011 should economic growth stall and the pace of spending cuts slow, the Cabinet Office said Wednesday.
The scenario underlines the need for the ruling bloc to stick to spending cuts despite increasing calls from within to boost outlays.
To achieve a surplus in the primary balance — a condition where outlays other than debt-servicing costs are covered by revenues without relying on debt issuance — the government is targeting an average nominal economic growth rate of 3 percent between fiscal 2007 and 2011 and ¥14.3 trillion in spending cuts over this period. The nominal growth rate does not take into account price changes.