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The
government will also continue to try to lower the ratio of debt
to gross domestic product, the draft said.
According to a government projection in January, a primary
budget surplus for the world's fourth-largest economy could
"come into sight" in fiscal 2025, assuming strong economic
growth and that efforts to cut spending continue.
Japan's primary budget balance - which excludes new bond sales
and debt servicing costs - has been in deficit for most of the
postwar era with the exception of the asset bubble period
between 1986 and 1991.
As a result, Japan now has the industrial world's worst public
debt at more than double the size of its economy. It first set
itself the goal of a primary budget surplus in the early 2000s
but target dates have been pushed back several times.
"Japan now faces unprecedented opportunities to fully exit
deflation and achieve growth," the draft said. "We need to move
forward to attain both an economic revival and fiscal health."
The draft, however, said the primary budget surplus goal should
not mean that the government could be deprived of key policy
options in certain economic circumstances.
The draft also highlighted the need for the government to work
closely with the central bank and guide policy "flexibly" to
achieve sustainable economic growth driven by demand from the
private sector.
"Monetary policy has entered a new stage," it also said, noting
that the Bank of Japan ended eight years of negative interest
rates in March.
The government draft will be presented to ruling party lawmakers
for deliberation before being finalised at a Cabinet meeting on
June 21.
(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs)
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