ST. PETERSBURG, Russia, Sept 5 Japanese Prime
Minister Shinzo Abe told the Group of 20 summit that Tokyo aims
to achieve both economic growth and fiscal reforms with his
pro-growth policy agenda, but steered clear of a pending
decision on a planned sales tax hike.
Speaking at the first session of the summit on Thursday, Abe
said Japan will pursue its aim of halving the budget deficit -
excluding new bond sales and debt-servicing - by the fiscal year
to March 2016 and achieving a surplus by March 2021.
But he made no mention of the planned doubling of the sales
tax over the next two years, as stipulated by a law passed last
year, which has become a focus of the fiscal debate in Japan.
"It is particularly important for Japan to achieve both
economic growth and fiscal consolidation as our country's fiscal
situation is severer than other countries," Abe was quoted by a
Japanese official as saying.
Japan's public debt is twice the size of its $5 trillion
economy, which is the worst ratio among industrial countries.
Abe is struggling to balance the need to rein in the
country's snowballing debt and stimulating growth in the world's
third-biggest economy with his "Abenomics" policy mix of bold
monetary easing, fiscal stimulus and pro-growth reform plans.
Japan, as well as other countries, presents its mid-term
fiscal plan at the G20 summit, but failure to raise the tax levy
as planned could jeopardise Tokyo's fiscal consolidation scheme.
At the G20 summit session, other countries did not take
issue with Abe's explanation, while Russian President Vladimir
Putin and IMF chief Christine Lagarde described 'Abenomics' as a
new movement, the official added.
Abe has repeatedly said he will make a decision this autumn
on whether to implement the tax hike, while examining economic
indicators to see if the economy would withstand its impact. The
decision is expected to be made by early October.
If there's no change in the plan, Japan's sales tax will be
raised to 8 percent from 5 percent in April and to 10 percent in
October 2015, a move seen as crucial in funding bulging welfare
costs and fixing Japan's dire fiscal situation.
Abe will cut short his summit attendance, leaving for Buenos
Aires later Thursday, where the International Olympic Committee
(IOC) will vote on Saturday to decide whether Istanbul, Madrid
or Tokyo will host the 2020 Summer Games.