tokyo dec 6 reuters  japans government should ditch its target to balance the budget and instead spend more to achieve the central banks 2 inflation target the head of the ruling partys new panel on fiscal policy told reuters on monday shoji nishida who heads the liberal democratic party ldp panel told reuters that fiscal policy had to carry the burden for any stimulus as monetary policy has too little room left for manoeuvre the fundamental cause of japans economy being mired in deflation is fiscal shrinkage due to the primary budget target nishida said it has disabled us from making longterm investment plans he said adding that it had hindered development of economic and medical infrastructure rd and training for workers the government has pledged to stick with its aim of achieving a primary budget surplus by fiscal 2025 with a caveat that the target will be reassessed this fiscal year due to the covid19 pandemic without that target for its primary budget which excludes new bond sales and debt servicing charges nishida said the government could spend 200 trillion yen to 300 trillion yen more over a decade on longterm investments which could catalyse privatesector investment and help boost economic growth the target is already looking unachievable as a result of heavy government spending to offset some of the impact on the economy from the pandemic nishida called for the government to boost fiscal spending until inflation reaches 45 and is hoping that the panels recommendations will be adopted during the midyear policy review due in june despite more than eight years of massive monetary stimulus the bank of japan has failed to bring inflation to its 2 goal making it virtually impossible to meet 2 price target by 2023 we are basically still in deflation nishida said its impossible to achieve with monetary policy but mobilising fiscal spending is important the boj should end its current policy sooner or later reporting by tetsushi kajimoto and kaori kaneko editing by changran kim  simon cameronmoore