Following the Cabinet's approval of a record ¥122.3 trillion fiscal 2026 budget, Prime Minister Sanae Takaichi announced a projected primary balance surplus—the first in 28 years—highlighting progress toward long-term fiscal health amid high debt concerns.
Japan's primary balance, which measures revenue against spending excluding debt-servicing costs, is set to return to surplus in fiscal 2026 for the first time since 1998, Prime Minister Sanae Takaichi stated on Friday. This comes after the Cabinet approved the ¥122.3 trillion ($782 billion) initial budget, as detailed in prior coverage.
Takaichi emphasized that the budget balances economic growth with fiscal sustainability: "I believe we have put together a budget that strikes a balance between achieving a strong economy and ensuring fiscal sustainability."
The announcement addresses market concerns over Japan's debt levels—the highest among developed nations—and Takaichi's expansionary spending. Achieving this surplus aligns with over two decades of Liberal Democratic Party (LDP) goals under her leadership, though sustained improvements will depend on economic challenges like inflation and yen weakness.