By Tetsushi Kajimoto

TOKYO (Reuters) – Japan may need more time to meet its budget target of achieving a primary balance surplus by fiscal 2025, Finance Minister Taro Aso said on Tuesday, while stopping short of abandoning the elusive target.

Some candidates in the Liberal Democratic Party’s (LDP), leadership race are cautious about the primary surplus goal due to uncertainties over the economic impact of COVID-19.

The ruling bloc’s overwhelming majority in parliament’s lower house makes it virtually certain that the winner will become the next prime minister.

Aso stated that the situation we find ourselves in is not ideal. The comments of the LDP candidates were not mentioned by Aso.

Aso stated that Japan’s tax revenues have grown in spite of the effects of the pandemic on an already fragile economy. This makes it difficult to predict the future fiscal outlook.

Aso said that he didn’t know how much fiscal spending would be required by the coronavirus.

He said, “It is important to strike the right balance between revenues and expenditure.”

To determine if Japan is able to finance its spending with tax revenues, the primary budget balance (which excludes debt servicing and new bond sales) serves as a gauge.

Japan’s fiscal stimulus programs have resulted in several delays to the primary balance target.

Private-sector analysts believe that the fiscal 2025 goal is difficult to reach, and even impossible.

In July, government projections indicated that the primary balance surplus target would be achieved in 2027. These estimates were two years ahead of previous estimates because of a surprising rise in taxes revenue.