The government has begun crafting a road map for the nation's fiscal rehabilitation — which Prime Minister Shinzo Abe promised to prepare by this summer when he made the decision last fall to postpone the second phase of the consumption tax hike by 18 months to April 2017. Abe says his administration is maintaining its goal of achieving a primary balance surplus in 2020 — though he denies ever making it an international commitment — by promoting growth through his "Abenomics" policies and boosting tax revenue.

But the latest estimates by the Cabinet Office show that Japan will still fall far short of the target even if its economy grows faster in the years to 2020 than it ever did over the past two decades. The figures indicate that fiscal reconstruction will be tough unless the government makes painful cuts to its spending, which hits a record ¥96.34 trillion in the fiscal 2015 general account budget.

The numbers tell the serious condition of Japan's fiscal health. Government debt reached ¥1,029.9 trillion at the end of last year — more than double the nation's nominal gross domestic product or roughly ¥8.1 million per capita — and it keep growing as the government continues to issue a massive amount of bonds each year to pay for expenses that far outnumber tax revenue. To put its fiscal house in order, the government needs to both cut expenses and boost revenue.

It's estimated that tax revenue in fiscal 2015 will reach ¥54.52 trillion — the highest in 24 years — due to improved corporate earnings and last April's consumption tax increase to 8 percent. As a result, the issue of government bonds will be trimmed by about ¥4 trillion from the previous year to ¥36.86 trillion, the first time in six years that the amount will fall below ¥40 trillion. But the increase in government expenditures remains unabated. Social security expenses, which account for roughly one-third of general-account expenditures, hit ¥31.5 trillion, rising by roughly ¥1 trillion each year as the population rapidly ages.

With the projected increase in tax revenue, the government says it is on course to achieve its goal of halving the ratio of primary balance deficit to GDP in fiscal 2015 from 2010's level. Still, it seems doubtful that it will achieve its longer-term target of posting a primary balance surplus — a condition in which tax and other revenue will pay for policy expenses without the government relying on more debt — in 2020.

According to the Cabinet Office estimate, the national and local governments combined will still have a ¥9.4 trillion primary balance deficit in 2020 even if the economy grows 2 percent or more in real terms and 3 percent or more in nominal terms each year. The calculation assumes that the consumption tax will rise to 10 percent in April 2017 on schedule.

The plausibility of the growth scenario is another question. Over the past 20 years, Japan's annual economic growth stood at an average of 0.9 percent in real terms, and nominal GDP growth never reached 3 percent. If the annual growth in the years to 2020 remains close to the past average, the deficit will reach an estimated ¥16.4 trillion — roughly the same level as projected for fiscal 2015.

The more rosy estimate highlights the difficulty of eliminating the deficit through high economic growth alone. Too much optimism over growth in the years to come could, meanwhile, raise doubts about the credibility of the fiscal rehabilitation road map now in the works.

Of course, a more sober forecast for economic growth will mean even greater efforts will be needed to trim expenses and increase revenue. Private-sector members of the government's Council on Economic and Fiscal Policy have recently proposed reducing the primary balance deficit by an average of ¥2.5 trillion each year — by revenue gains through economic growth as well as by cuts to social security expenses and tax grants and other spending by local administrations. This would be an enormous task given that the government's spending has rarely fallen below the previous year's levels and that the size of the general-account budget ballooned by roughly ¥14 trillion over the past decade.

Tax increases may be among the options for fiscal rehabilitation. Some private-sector proposals in fact call for additional hikes in the consumption tax as a means of achieving the target to eliminate the deficit. But Akira Amari, minister in charge of economy revitalization, has already ruled out further hikes until 2020 after the rate is increased to 10 percent in 2017. In this case, the Abe administration would need to be all the more serious about cutting expenses, and reforms of the social security programs in all areas — pension, medical and nursing care services — would be unavoidable. Still, the administration appears to place emphasis on revenue increases from economic growth, and hesitates to make commitments on painful social security reforms.

Since the 1990s, the government has relied on a series of debt-financed stimulus packages to shore up the economy. The nation's fiscal health further deteriorated after the global recession in the wake of the 2008 collapse of Lehman Brothers led to more stimulus measures. Growth in Japan remained sluggish, while the cost of the stimulus efforts continues to be passed on to future generations.

The forthcoming fiscal rehabilitation plan may give clues as to whether the Abe administration is serious about breaking away from this deeply entrenched pattern.