Japan Says It May Miss Balanced-Budget Goal Even If Sales Tax Is Doubled

Japan will probably miss its goal of balancing the budget by fiscal 2020 even if it doubles the nation’s sales tax, government estimates show.

Japan will have a primary deficit of 3.1 percent of gross domestic product in the year, the Cabinet Office said in a report released in Tokyo today. The projections are made based on assumption that the world’s third-largest economy will grow about 1 percent annually. The government had wanted to achieve a primary balance, which is achieved when revenue matches spending, excluding bond sales and interest payments, by the year ending March 2021.

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

To contact the editor responsible for this story: Lily Nonomiya at lnonomiya@bloomberg.net

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