TOKYO: Japan will work to stably issue government bonds (JGBs) worth 215 trillion yen ($1.89 trillion) in the next fiscal year through close dialogue with markets, its finance minister said, after rounds of heavy stimulus to fight the COVID-19 pandemic boosted issuance to 224 trillion yen this fiscal year.
With its population rapidly ageing, Japan's public finances are facing structural problems over imbalances between benefits and burdens in social security system, Finance Minister Shunichi Suzuki said in his fiscal policy speech on Monday, while vowing to bring in a primary budget surplus by the fiscal year 2025.
Japan has set a goal of achieving a primary budget surplus, excluding new bond sales and debt servicing costs, by fiscal 2025, as a step towards curbing the industrial world's heaviest debt that is more than twice the size of its $5 trillion economy.
Fiscal reform is an urgent task, but Prime Minister Fumio Kishida, known as fiscal hawk, has prioritised a recovery from the health crisis near-term over long-term fiscal reform since he took office in October.
"Public finances are the cornerstone of country's confidence," Suzuki told the lower house plenary at the start of parliament's regular sessions.
"We will proceed with reform on both revenue and spending sides so as to achieve the fiscal 2025 primary surplus target without abandoning fiscal reform."
Japan's economy is facing the spread of the Omicron variant which is affecting people's livelihoods, although it was gradually recovering from the severe situation caused by the pandemic, Suzuki said.
The economy was expected to pick up due to policy support measures and improving overseas economies, but downside risks warrant fully careful attention, he said.
"There's no crisis that Japan cannot overcome after getting over many difficulties," Suzuki said. "We must first overcome the current crisis, restore the economy and tackle fiscal reform so that we can hand the future to the next generation."