The Cabinet Office presents the latest calculations for the ``primary fiscal balance,'' an indicator of fiscal soundness, showing that even assuming high growth, there will be a deficit of around 1.1 trillion yen in fiscal 2025, when the government aims to return to a surplus. We are expecting.
The "primary fiscal balance" is an indicator that shows how much of the expenses allocated to policy can be covered by tax revenue, etc., and the government has set a goal of achieving a surplus in fiscal 2025.
At the Economic and Fiscal Policy Council meeting on the 22nd, the Cabinet Office presented the latest estimates based on current results.
According to this, if the annual growth rate is around 0% in both real and nominal terms excluding price fluctuations, there will be a deficit of around 2.6 trillion yen in fiscal 2025.
The deficit has expanded by about 300 billion yen since last July's estimate due to expected expenditures from economic measures formulated last year.
On the other hand, even if we assume higher growth of around 2% in real terms and 3% in nominal terms, there will be a deficit of around 1.1 trillion yen in FY2025.
Although the deficit will be smaller than the previous estimate, the target will not be achieved and we do not expect to be in the black until fiscal 2026.
The Cabinet Office maintains the outlook that ``a surplus in fiscal 2025 is within sight,'' but achieving a surplus will require the realization of high growth and thorough spending reforms.
In addition, whether the government can show a path to fiscal health in the medium-term fiscal framework it aims to formulate in the new fiscal year will be questioned.
Prime Minister Kishida: ``We will steadily advance fiscal consolidation''
At the Economic and Fiscal Policy Council, Prime Minister Kishida said, ``In this medium-term estimate, by achieving high economic growth led by private demand and continuing expenditure reform, we are aiming for a surplus in the primary balance of the national and local governments in 2025.'' It has been shown that fiscal reform is on the horizon.We will continue to steadily advance fiscal consolidation to ensure that confidence in fiscal sustainability is not lost."
After that, he instructed the government to compile concrete measures to resolve issues such as population decline, declining birthrate and aging population, and lead to economic growth, with the aim of creating this year's "robust policies."