Abe Tackles World's Heaviest Debt Burden

Japanese Prime Minister Shinzo Abe is set on Tuesday to sign off on a plan to curb the world’s heaviest debt burden.
To approach his balanced budget target by 2020, Abe has to cap spending growth, get economic expansion to a level Japan hasn’t seen since 1991, and stoke inflation that's near zero.
And consumers -- who pushed Japan into a recession after a hike in the sales tax last year -- will have to stomach another bump in the tax without complaint.
“The fiscal target that the Abe administration is aiming for is so tough that it has no choice but to assume the most optimistic economic scenario,” said Hidenori Suezawa, an analyst at SMBC Nikko Securities Inc. “There’s a risk that if just one thing goes wrong, the whole plan blow ups.”
As the charts below show, Abe can point to signs of improvement, but still has a hard road ahead.

The government shortfall is starting to narrow, as a pick up in economic growth boosts tax revenue that imploded with the global financial crisis.
Much credit for recent progress goes to the central bank, which on cue from the Abenomics reflation agenda, is pumping unprecedented monetary stimulus into the world’s third-biggest economy. A 24 percent drop in the yen since Governor Haruhiko Kuroda launched the stimulus program in April 2013 is helping drive record corporate profits -- a windfall for tax receipts.
With leeway to buy all new bonds issued by the government, the Bank of Japan is also pushing borrowing costs below the pace of nominal economic growth. If that’s sustained over the long term, the government could grow out of its debt, said Toru Suehiro, an economist at Mizuho Securities Co.