TOKYO (Reuters) – Japan kept its forecasts unchanged on Thursday for a return to a budget surplus over the long-term, even though the impact of the coronavirus pandemic on its economy and debt pile remains uncertain.
In its twice-yearly fiscal and economic projections, the government forecast that the primary budget, excluding new bond sales and debt servicing, would achieve a surplus of 300 billion yen ($2.9 billion) in the fiscal year starting April 2029.
That was unchanged from its previous forecast released last July, when it pushed back the projection for achieving the surplus by two years.
The uncertainty hanging over the economic outlook due to COVID-19 is particularly painful for Japan, which is saddled with a public debt burden more than twice the size of its $5 trillion economy, the biggest among industrialised nations.
“The decline in tax revenue for fiscal 2021 was factored in last summer, in the estimate from July,” Economy Minister Yasutoshi Nishimura told a news conference after the government presented the figures at its top economic and fiscal policy panel.
That meant the forecasts nearly matched what the government had previously expected, Nishimura said, adding that the forecasts did not factor in any fiscal reform measures.
“If fiscal reform goes ahead as it has previously… it’s possible to move (the target) forward by about three years,” Nishimura added.
(Reporting by Daniel Leussink; Editing by Edwina Gibbs and Gareth Jones)