Japan has begun a three-year budget deficit of $4 billion, its first one since 2006, as it struggles to contain a ballooning national debt and as the country’s economy struggles to recover from a devastating tsunami.
The government is aiming to slash its spending in the first quarter from its current level of $10.9 billion, a decline of about $4 per person, to $7 billion, according to data released by Japan’s Cabinet Office.
Japan has an $8.4 trillion debt, roughly equal to more than half the size of Germany.
A sharp decline in foreign direct investment is one of the reasons Japan has been struggling to generate growth in recent years, but a drop in foreign remittances from abroad is another, and the government has been seeking to encourage domestic business investment.
Prime Minister Shinzo Abe is hoping to win support from a wide range of parties for his bid to revive the economy by boosting infrastructure spending and boosting domestic investment.
Foreign direct investment accounts for about a quarter of Japan’s $1.4-trillion economy, and about 70 percent of the countrys export earnings, according the Ministry of Economy, Trade and Industry.
The economy contracted by 1.4 percent in the third quarter of 2018, with a net loss of ¥9.7 trillion ($1.9 trillion).
Abe’s goal is to return the economy to a growth rate of 5 percent by 2019.
Japan has been facing a steady decline in its economy for years.
The country was a net contributor to global growth in the second half of the 20th century, contributing about 6.6 percent of global GDP.
The country has a debt of nearly ¥9 trillion, and a projected deficit of ¥6.4.
Japan is forecast to hit a debt-to-GDP ratio of nearly 40 percent by the end of 2019.