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

2014/01/01

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
  • Taro Kono starts well as Japan's foreign minister

    2017/08/15 Foreign Minister Taro Kono made his presence felt on his initial overseas trip since taking the position last week. In fluent English, Kono exchanged opinions with other foreign ministers and distinguished himself on several occasions, inclunding with an off-the-cuff counterargument to Chinese Foreign Minister Wang Yi. Although Kono has made a solid start, however, the diplomatic arena contains a lot of pending issues — and producing good results will not be easy.
  • Tokyu Land Corporation From Tokyo’s pulsing heart, Shibuya, to Manhattan: TLC eyes global expansion

    2017/08/09 With a diversified portfolio of services, Tokyu Land Corporation–one of the leading real estate companies in Japan–is reshaping the urban face of Tokyo with a long-term vision beyond 2020 and participating in the landmark redevelopment of 425 Park Avenue–a multipurpose building in the Plaza District of Manhattan To what extent are world economic events and local developments such as Abenomics and the 2020 Olympic Games impacting the real estate market?
  • Japanese Technology Innovation behind the scenes

    2017/08/09 Traditional technology pioneer Japan has faced increasingly stiff competition from the likes of Korea, Taiwan and China in the manufacturing stakes in recent years, and in a lot of cases, has been completely overtaken by its regional counterparts in international consumer markets as some of the country’s most well-known technology brands have experienced a dramatic fall from grace. To the outsider looking in, it would seem that Japan has somewhat lost its characteristic innovative edge. Both the Japanese and industry experts alike, however, argue that this is far from the truth. While goods made by once-leading Japanese electronics firms such as Sharp and Toshiba may have been steadily and undeniably restored by gadgets from their Asian competitors on department store shelves, the country’s manufacturers are indeed still ahead of the game in the technology sphere, only in areas where it’s not so obvious to customers.
  • Japan–EU negotiations racing against protectionism

    2017/07/10 The Japan–EU Economic Partnership Agreement (EPA) negotiations appear to be coming down to the wire. Both sides are aiming to reach a framework agreement prior to the G20 summit on 7 July. Agriculture, as usual, is one of the sticking points, particularly for items such as cheese. The domestic political setting in Japan shows some of the usual signs of tension. The Japanese government is seeking to advance the country’s wider trade goals by reducing tariffs and other import barriers in overseas markets. On the other hand, Japan’s farm lobby — led by the Japan Agricultural Cooperatives Group (JA Group) and their allied politicians in the ruling Liberal Democratic Party (LDP) — is seeking to maintain specific barriers to imports of farm products given Japan’s small-scale and inefficient agricultural sector.