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Japan sets high bar for economic growth

Prime Minister Shinzo Abe, center, addresses a joint session of panels on economic and fiscal policy and industrial competitiveness.

TOKYO -- While Japan's latest economic and fiscal plan is designed to achieve both growth and fiscal rehabilitation, its assumptions of increases in tax revenue and curbs on spending both present major hurdles.

     The government aims to have a primary surplus by fiscal 2020. The Cabinet Office estimated back in February that the nation would still have a primary deficit of 9.4 trillion yen ($76.1 billion) in fiscal 2020 even if the economy grows 2% a year in real terms. Tax revenues for fiscal 2014 are expected to be about 2.2 trillion yen higher than a January projection. Given this data, the majority view in the government is that higher tax revenues will help wipe out a certain portion of the deficit.

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