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Japan PM Abe's key ministers vow to stick to fiscal 2020 budget goal

Reuters

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe's key economy ministers pledged on Friday to stick to the government's target of achieving a balanced budget in the fiscal year ending in March 2021, by pursuing both economic growth and fiscal consolidation.

The ministers made the pledge before parliament after the government submitted a record annual budget spending plan of 97.5 trillion yen ($851.31 billion) for the fiscal year starting April 1.

The plan likely will spur fresh concerns about Japan's debt burden, the heaviest in the industrial world.

"We will strengthen efforts to reform spending and revenue in order to bring the primary balance into the black in fiscal 2020," Finance Minister Taro Aso told the lower house of parliament.

Economy Minister Nobuteru Ishihara echoed the resolve to achieve the primary budget balance - excluding new bond sales and debt servicing - which is a key barometer of government efforts to balance budget spending with revenue.

With government bond issuance totaling around 154 trillion yen in the coming fiscal year, Aso said he would guide debt management policy appropriately while communicating closely with the market.

He reiterated that the government will use all its policy tools - monetary and fiscal policies and structural reform - to accelerate the three-pronged reflationary policy dubbed "Abenomics".

Ishihara, who also spoke to mark the opening of the regular session of parliament, reiterated the government's expectations that the Bank of Japan will take steps to meet its inflation target.

"We continue to expect the BOJ to meet its 2 percent price stability target, taking into account trends in the economy and prices," he said.

Ishihara said the government's baseline scenario is that a tight labor market and gains in wages are supporting a moderate recovery in the economy.

Policymakers also need to vigilantly monitor risks posed by financial market moves and by uncertainty in overseas economies, the economy minister also said.

(Reporting by Tetsushi Kajimoto and Stanley White; Editing by Richard Borsuk)