Japan Plans Delay for Fiscal Surplus Target to 2026 Amid Economic Pressure

Japan is considering delaying its target to achieve a primary budget surplus from fiscal year 2025 to sometime between fiscal 2025 and 2026 due to economic challenges, including uncertainty caused by U.S. tariffs. The government faces growing pressure to increase spending or cut taxes to ease rising living costs as elections approach, complicating fiscal consolidation efforts. The primary budget deficit is projected to remain significant, with stimulus spending and social welfare costs contributing to ongoing fiscal strain. Japan's fiscal health remains weak, with debt exceeding twice its economy's size, and the country has not had a basic fiscal surplus since 1991. Officials plan to finalize a revised fiscal blueprint by mid-June, balancing the need for stimulus against fiscal discipline. This adjustment signals a pragmatic shift acknowledging the difficulty in reaching fiscal targets amid global economic uncertainties and domestic political pressures.