Japan budget deficit to cross 10 trln yen in 2015 - Nikkei

Fri May 20, 2011 11:58pm IST

A 10,000 Yen banknote is displayed under a light to demonstrate how it differs from a forgery at the currency museum of the Bank of Japan in Tokyo October 6, 2010. REUTERS/Kim Kyung-Hoon/Files

A 10,000 Yen banknote is displayed under a light to demonstrate how it differs from a forgery at the currency museum of the Bank of Japan in Tokyo October 6, 2010.

Credit: Reuters/Kim Kyung-Hoon/Files

REUTERS - Japan's national budget deficit could exceed 10 trillion yen($122.53 billion) in 2015, excluding the costs to rebuild the disaster-stricken northeast, the Nikkei daily reported citing government projections.

The consumption tax rate, which is currently 5 percent, will need to be raised by about 5 percentage points to make up the difference, the business paper said.

Economic and fiscal policy minister Kaoru Yosano will present the budget forecasts in June as part of a proposal to a government council on social security reform, the daily said.

Yosano is expected to explicitly call for raising the tax, the newspaper said.

Costs associated with reforming pensions, health care and other entitlements account for some 8 trillion yen of the projected budget shortfall, the Nikkei said.

The figures, based on current levels of spending on public works and other areas besides social security, show the impact of the changes under debate in the council, the Nikkei said.

On the revenue side, the projections are premised on existing tax policies and a conservative outlook for economic growth, the newspaper said.

They also assume that the government will stick to its goal of halving the primary deficit by fiscal 2015 and achieving a primary surplus in fiscal 2020, the business daily said.

The forecasts also factor in proposed expansion of benefits for the youth and low-income individuals, growth in social security expenditures as well as spending to maintain the government's 50 percent contribution to the basic pension program, the Nikkei added.

In terms of the consumption tax, these outlays add up to a rate of about 3 percent, and another 2-4 trillion yen in revenue would be needed to cut the primary deficit by half, the paper said.

($1 = 81.610 Japanese Yen)

(Reporting by Aniket Basu in Bangalore;Editing by Prem Udayabhanu)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

FCI Revamp

FCI Revamp

Govt begins revamp of Food Corporation of India to cut waste, tame prices  Full Article 

Banking Fraud

Banking Fraud

Govt probing alleged fraud in two state-run bank branches   Full Article 

New Metro Rail

New Metro Rail

Cabinet approves $1.4 bln new metro rail project   Full Article 

Gold Stagnation

Gold Stagnation

Fading volatility promises long period of gold stagnation  Full Article 

Onion Price

Onion Price

Cabinet cuts onion export price by 30 pct  Full Article 

Housing Policy

Housing Policy

RBI deputy gov says cbank tweaking policies for affordable housing  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage