Asia > Eastern Asia > Japan > Japan Aims To Cut Deficit Next Year On Sales Tax Collection

Japan: Japan Aims To Cut Deficit Next Year On Sales Tax Collection


Japan's cabinet on Tuesday approved the draft budget for the fiscal 2014 as Prime Minister Shinzo Abe targets to balance borrowing and record spending to stimulate economic recovery.

The government plans to spend a record JPY 95.88 trillion in 2014/15. The increase in expenditures for defense, public works projects and social security programs will take in general general account spending to record JPY 72.61 trillion, up by JPY 2.24 trillion from this fiscal.

At the same time, revenues are estimate to reach JPY 50 trillion, the highest in seven years, on an expected 1.4 % economic increase and planned sales tax hike.

On Saturday, the government raised the economic increase outlook for the fiscal 2014 to 1.4 % from 1 %.

The government estimates primary deficit to narrow by JPY 5.2 trillion from this year to JPY 18 trillion in fiscal 2014, which is one of the best improvements on record.

According to the draft statement, the Ministry of Finance will sell only JPY 41.25 trillion new bonds in the fiscal 2014, which is less than the JPY 1.6 trillion from this year's initial plan.

The government depends on borrowing to cover 43 % of its spending. That compares to 46.3 % this fiscal year. The government plans to submit the draft budget to parliament early next year.

Before in the day, Japan's government dropped 'deflation' from its monthly economic statement for the initial time in four years.

The Cabinet Office noted that consumer prices are firm. But, an official said it is too early to declare that deflation is over. In last month's statement, it said "Recent price developments indicate that the deflation is ending."

Related Articles
  • Old companies abound in Japan.

    2015/05/05 Successful businesses shine for a few years, again nimbler competitors outwit them in a constant cycle that spans being feted to forgotten in less than a generation. But Japan has something different: thousands of companies that have prospered for centuries. Japan has additional old companies than any other developed country. A study of 41 nations carried out by the Bank of Korea found that Japan has additional than half of the known pool of companies older than 200 years. The longevity of Japanese businesses, from a 378-year-old sake maker to a four-century-old construction company that started in temple carpentry, half has roots in the country’s hermetic history. Limited contact with the outside world nurtured a distinctive culture valuing loyalty and continuity. Since the mid-19th century, at the same time as American pressure prized open Japan to the Western world, those traits provided an anchor as commercial life was confronted with innovations and pressures from abroad.
  • Japan's inflation rate up 2.2% in March as BOJ keeps policy unchanged

    2015/05/02 Japan’s core inflation rate edged up in March and unemployment eased slightly, according to data released Friday, offering glimmers of promise for the world’s No. 3 economy as it struggles to get increase back on track next years of stagnation. Though a decline in factory output and other key measures were less encouraging, the central bank kept its ultra-loose monetary policy unchanged in a policy conference Thursday. Some investors and analysts expected additional stimulus to be announced. The central bank governor, Haruhiko Kuroda, acknowledged that his target of 2% inflation, excluding the impact of an April 2014 increase in the sales tax to 8% from 5%, remains elusive. He said actual inflation is flat at 0% and it may take three years, instead of the two years he originally aimed for, to reach that goal.
  • Japan Tobacco to buy U.S. e-cigarette maker

    2015/05/02 Japan Tobacco said on Thursday it had agreed to buy Florida-based e-cigarette maker Logic Technology Development LLC as it aims to become a world leader in the nascent, but fast-growing, market. Japan Tobacco will fund the acquisition with existing cash and loan facilities, and expects to complete the transaction in the third quarter of this year following regulatory approval, it said.
  • Hotel Gracery Shinjuku opens in Tokyo with Godzilla-themed rooms

    2015/04/24 Leading Japanese hotelier Fujita Kanko Inc opens Hotel Gracery Shinjuku tomorrow, the Hotel Gracery brand’s new flagship, in Kabukicho, Tokyo’s entertainment and nightlife hub (the Tokyo district that at no time sleeps) in the Shinjuku ward. The 970-room hotel opens as part of a brand-new Kabukicho entertainment complex, Shinjuku Toho Building. The building as well offers a 12-screen cinema complex and various dining and amusement facilities. For months, there has been worldwide buzz about the hotel’s one-of-a-kind Godzilla-themed guest rooms that will transport guests into the world of the celebrated monster movies. “We are excited about Hotel Gracery Shinjuku’s debut next so much anticipation. Our Godzilla-themed rooms are booked for months. We are ready to demonstrate that our commitment to service is bigger than Godzilla,” says Akira Segawa, President and CEO of Fujita Kanko.
  • Revised IMF forecasts signal gloom on global economic outlook

    2015/01/20 Low oil prices will not provide a sufficient updraught to dispel the clouds hanging over the world economy, the International Monetary Fund said on Tuesday. In a sign of its increasing gloom about the medium term economic outlook, the IMF cut its world economic increase forecasts by 0.3 % points for both 2015 and 2016, despite believing cheaper oil represents a “shot in the arm”.