Japan government says won't meet FY 2020 fiscal discipline targets

Japan's government said on Wednesday that it will not achieve its target of returning to a primary budget surplus in fiscal 2020, suggesting further steps will be needed to boost revenue and lower spending. The target is considered an important checkpoint for Japan as it seeks to reduce a debt/GDP ratio that is the worst in the industrialised world, with public debt standing at around twice the size of its economy.
Giving greater priority to bolstering economic growth, Prime Minister Shinzo Abe's leading panel of advisers agreed budget guidelines on Wednesday that eschew spending cut targets, raising concerns the government could easily increase fiscal spending and add to the debt burden. The Cabinet Office, which helps co-ordinate economic policy, said it expects consumer prices to rise more slowly than the Bank of Japan's 2 percent inflation target in fiscal 2016 due to declines in oil prices. It also forecast the primary budget deficit, which excludes debt servicing costs and income from bond sales, will reach 6.2 trillion yen ($50.15 billion) or 1.0 percent of gross domestic product in fiscal 2020.