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Government’s fiscal reform target needs a reality check

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When will the government stop pretending that its completely unrealistic fiscal reform policy target is still achievable by drawing on outrageously optimistic assumptions about the nation’s economy in the coming years?

This is a question that has been raised afresh by the medium- to long-term fiscal projections the government unveiled on July 31.

In response to the devastating damage the new coronavirus pandemic is causing to the economy, the Cabinet Office has sharply revised downward its growth forecast for fiscal 2020. It now predicts that the Japanese economy will contract by 4.5 percent in real terms in the year through March 2021, instead of expanding by 1.4 percent as it previously projected.

Accordingly, the Cabinet Office says the nation’s primary budget balance will be brought into the black only in fiscal 2029, two years later than the year mentioned in its previous projections announced in January.

Prime Minister Shinzo Abe’s administration has been pursuing a fiscal health target of achieving a primary surplus in........

© The Asahi Shimbun

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