Japan's Fiscal Goals Face New Timeline Amid Economic Challenges

Japan considers extending its balanced budget goal to fiscal year 2026 due to economic challenges and rising costs from U.S. tariffs. Pressured by lawmakers, Prime Minister Ishiba might need to boost spending or cut taxes before the elections. The government plans to finalize the new fiscal blueprint by mid-June.

Japan's government may extend its deadline for achieving a balanced budget to fiscal year 2026, responding to economic challenges and U.S. tariffs, a ruling party executive revealed Thursday. This decision comes amid concerns of economic growth falling short of expectations.

Prime Minister Shigeru Ishiba faces mounting pressure from lawmakers who are advocating for increased spending or tax cuts to alleviate rising living costs as elections approach. The original fiscal goals, set to achieve a surplus by 2025, may shift to accommodate these financial strains.

The ruling coalition is expected to finalize a revised fiscal blueprint by mid-June, as officials seek to navigate Japan's worsening financial situation and advocate for fair trade agreements with the United States.

(With inputs from agencies.)