Japan will delay its goal of achieving a primary budget surplus by two years until fiscal 2027, as the government plans to spend some revenue from a planned increase in sales tax on social measures, the Nikkei business daily reported on Thursday.
New fiscal projections by the Cabinet Office are expected to be presented to the government’s top macro economic policy panel, the Council on Economic and Fiscal Policy, later this month, the Nikkei said.
Prime Minister Shinzo Abe’s government has already said it plans to use some revenue from the sales tax hike slated in 2019 on child care and education rather than paying back public debt.
The government’s previous projections in July last year showed the budget would swing to a primary surplus in fiscal 2025.
Its original goal was to achieve the surplus — which excludes debt servicing and new bond sales — in fiscal 2020.
But Abe’s ruling Liberal Democratic Party omitted this deadline from its campaign platform for last October’s election and made spending on education and welfare a central plank of its campaign.