Japan may achieve fiscal health in the year ending March 2028, one year later than previously estimated, due to decreased tax revenues amid a slowdown in the global economy, the government's latest projections showed Wednesday.
According to the long-term projections, the government will run a deficit in the primary balance, which is tax revenues minus spending except to pay interest on past debt, at ¥2.3 trillion ($21 billion) in fiscal 2025, and the balance will likely be "just about break-even" — though remaining in the red — in fiscal 2026.
In its previous projections in January, the Cabinet Office expected the economy to achieve fiscal consolidation in the year ending March 2027. But it has pushed back the estimated timing to the following year as Japan's gross domestic product is unlikely to expand as planned due in part to trade tensions between the United States and China.