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Japan has set ambitious targets to rein in its debt. But it's admitted they'll be hard to achieve, even under its rosiest growth scenario. The targets set the stage for politically contentious tax hikes.
Japan's Prime Minister Naoto Kan has made fiscal reform a top priority, and has said he will consider doubling the 5 percent sales tax. The fiscal reform plan didn't factor in any tax rises, but said the government should reach an early conclusion on overhauling the sales and other taxes. It aimed to bring its primary budget balance, into surplus in a decade. Then Japan will start to steadily reduce its debt which is currently around 200 percent of GDP.