Japan expects a smaller-than-projected primary balance deficit of ¥1.3 trillion ($9 billion) in fiscal 2025 due to increased tax revenue, though returning to a surplus will likely not come until a year later than the country’s stated goal, the government said Tuesday.
The updated estimate, based on a more optimistic economic growth scenario, still underscores the daunting challenge of restoring the country’s fiscal health, the worst among advanced economies, as Prime Minister Fumio Kishida aims to sharply increase spending on defense and child care.
The projected fiscal 2025 deficit in the primary balance — tax revenues minus spending except for debt-servicing costs — compares with the ¥1.5 trillion estimate in January.
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