The government of Prime Minister Shinzo Abe will postpone its goal of turning the primary budget balance into a surplus in fiscal 2020, as it aims to use more funds for spending than repaying debts, sources said Wednesday. Abe is expected to announce Monday plans to dissolve the House of Representatives for a snap election and to divert part of additional revenue from the planned consumption tax increase to finance child-rearing support and free education programs, to attract votes, the sources said. A primary budget surplus means the government can finance its spending on policy measures, except for debt-servicing costs, without new debt issuance. According to an estimate by the Cabinet Office, the government is expected to suffer a primary budget deficit of ¥8.2 trillion in fiscal 2020 even if it carries out the planned consumption tax hike from 8 percent to 10 percent in October 2019 and the Japanese economy grows at over 3 percent annually. Dropping the fiscal 2020 budget surplus target, which is an international pledge, clearly indicates the "Abenomics" economic policy seeking both growth and fiscal consolidation has reached a stalemate, critics pointed out.
Sep-21-2017, 01:05:03 GMT