Japan’s target of balancing its budget by fiscal 2025 is essentially out of reach, and pushing for it too hard would derail the pandemic-hit economy, according to Ayako Fujita, a member of the finance ministry’s debt-management panel.
"It’s pretty much impossible,” Fujita said of the goal to balance the government’s budget excluding debt-servicing payments by the year ending March 2026.
Measures such as spending cuts or tax increases to meet the goal would shave 1% off the economy each year and are therefore unlikely, Fujita, a senior economist at JPMorgan Securities, said in an interview.