TOKYO (Reuters) - Japan’s government is seeking to stimulate economic growth and defeat its entrenched deflation while also reforming its public finances, a draft outline of next year’s fiscal budget obtained by Reuters showed on Friday.
Prime Minister Shinzo Abe’s cabinet is expected to approve the outline on Dec. 1, which will lay the ground for the government to craft the fiscal year 2016 budget later next month.
The budget will be compiled along with a supplementary budget for the current fiscal year.
Through its budget, the government seeks to boost GDP by a fifth over the next five years and support farmers seen to be affected by the Trans-Pacific Partnership free-trade deal.
“With the population declining and aging further from now, we need to make public finances sustainable,” the draft outline says, stressing the need to revamp Japan’s economy and finances.
The outline calls for an across-the-board review of spending without exception and a budget allocation to areas where strong policy effects are expected.
The outline calls for the budget to be compiled in line with the government’s plan to limit an increase in budget spending to 1.6 trillion yen over the next three years.
The coming budget is seen as crucial, as it will be the first since Abe’s government unveiled a plan to achieve a primary budget surplus in five years’ time.
Japan is targeting a primary budget surplus, which excludes debt-servicing costs and new bond sales, by fiscal 2020 in a bid to curb public debt, which is more than twice gross domestic product, by far the biggest burden in the developed world.
Reporting by Takaya Yamaguchi and Tetsushi Kajimoto; Editing by Sam Holmes