22 Jan 2011

Dire budget shortfall predicted by 2020 in Japan

6:44 am on 22 January 2011

Japan's annual budget shortfall could be 23.2 trillion yen ($US280 billion) by 2020, according to an official forecast. The figures are worse than previously estimated.

The BBC reports the national debt is around twice the size of the economy and the government has pledged to turn the annual budget deficit into a surplus by 2020.

Economic and Fiscal Policy minister Kaoru Yosano has warned the country is at a "critical point", and, without reform, risks losing investor confidence.

Prime Minister Naoto Kan has called for a national debate on increasing the 5% consumption tax to plug the gap.