TOKYO, Jan. 22 (Xinhua) -- Japan is projected to fail to achieve a primary balance surplus in fiscal 2026, missing its fiscal health target again and reflecting aggressive fiscal spending under Prime Minister Sanae Takaichi's government, the Cabinet Office said Thursday.
At a meeting of the government's top economic council, Japan is forecast to run a deficit of about 7 trillion yen (about 44 billion U.S. dollars) in the current fiscal year ending March 2026, or 1.0 percent of gross domestic product (GDP).
According to the latest projection, for the next fiscal year starting April, the primary budget balance is expected to improve to a deficit of 0.8 trillion yen but fail to match an earlier forecast of a 3.6 trillion yen surplus.
Primary budget balance is an indicator of whether the government can finance its spending, such as on social security and public works, without relying on debt. Japan's primary balance has been in deficit for most of the postwar era, resulting in a vast debt pile more than twice the size of its economy.
The target of returning to a budget surplus, first introduced in the early 2000s, has been pushed back multiple times, with the country's debt estimated at 229.6 percent of GDP as of October 2025, the worst ratio among developed economies.
The basic economic and fiscal policy approved by the cabinet in June last year under former Prime Minister Shigeru Ishiba aimed to achieve a primary surplus "as soon as possible between fiscal 2025 and fiscal 2026."
Financial markets are concerned that Takaichi's massive spending on an economic stimulus package may increase the risk of worsening finances for the country. ■
