Japan’s primary fiscal deficit will probably narrow to 7.1 percent of gross domestic product in the year ending March 2011, according to estimates released by the Cabinet Office.
The 33.5 trillion yen ($374 billion) gap is smaller than the projected 40.6 trillion yen, or 8.6 percent, shortfall for this fiscal year, the government said in a statement released in Tokyo today. The measure doesn’t account for Japan’s swelling debt-financing costs, which will eat up about a fifth of the country’s record 92.3 trillion yen budget next year.
Standard & Poor’s cut the outlook for Japan’s Aa sovereign credit rating last month, citing Prime Minister Yukio Hatoyama’s failure to come up with policies to contain finances. The Finance Ministry forecasts public debt will swell to 973 trillion yen by March 2011, exacerbating a debt load that’s already the largest in the industrialized world.
The former Liberal Democratic Party-led government had pledged to eradicate the nation’s primary deficit by fiscal 2011, a promise that was abandoned last year as the global financial crisis pushed Japan into its worst postwar recession. Hatoyama hasn’t adopted any fiscal targets since his Democratic Party of Japan came to power for the first time in September.
A primary surplus is achieved when revenue exceeds spending, excluding bond sales and interest payments.
http://www.bloomberg.com/apps/news?pid=20601101&sid=aH.re0uqgjOY
|
