WHEN, in November, Shinzo Abe postponed a second planned increase of Japan’s consumption (sales) tax it was the right thing to do: after all, the first in April 2014, had knocked an already fragile economy. But with Japan running a far looser fiscal policy than any other rich country—the budget deficit is 6.9% of GDP—the prime minister needed at the same time to promise a credible longer-term plan for lowering the country’s mountain of public debt, which stands at 246% of GDP and rising. The plan is due to be published this summer, though its broad outlines are already known. Worries are growing that it will shirk the task.

Several economists say the plan makes highly optimistic assumptions about future economic growth, and therefore also about tax revenues. The government has laid out two scenarios for the national debt. The gloomier one envisages that Mr Abe’s efforts to revive the economy will fall short, with average growth of just 1% a year, and that Japan will barely escape from the deflationary trap in which it has been caught for years. If so, the country would miss by a mile the 2020 target that politicians promised in 2010 of bringing the primary budget into surplus (ie, before interest payments are taken into account). This is the political establishment’s main commitment to bringing down the national debt, so missing it would matter.

Unsurprisingly, the government says it believes in the alternative scenario of “revitalisation”. In this case deflation gives way to inflation of 2% or so, and the government initiates sweeping structural reforms that boost productivity and foster economic growth of more than 2% a year until 2023. That is a zippier rate than some are predicting even for America, where the population, unlike Japan’s, is rising.

Under these optimistic assumptions, the government predicts a flood of tax revenues, alleviating the need for big cuts to spending or for tax increases beyond the second rise in the consumption tax from 8% to 10% (postponed from this year to April 2017). Yet even so Japan would fall short of the promise to bring the primary budget into surplus by 2020: it would still be 1.6% of GDP in deficit. In terms of the government’s finances, perhaps it does not matter right now which scenario proves to be the more accurate. After all, the national debt, despite its gargantuan size, is not an immediate risk to financial stability. Nine-tenths of the debt is held domestically, so the government-bond market is not at the mercy of jittery foreigners. What is more, the Bank of Japan’s huge programme of quantitative easing has brought bond yields down to record lows. However, the government cannot keep those yields at rock bottom unless it remains credible, and the central bank will at some point want to end quantitative easing. As it is, the cost of servicing the national debt consumes nearly a quarter of the budget—more than pensions or health care. The cost would shoot up were bond yields to climb. The government thinks that recent economic news justifies its optimism. After a period of slow growth, GDP expanded at an annualised rate of 3.9% in the first three months of the year, as inventories increased and businesses boosted investment in the hope of higher consumption. But such growth will be hard if not impossible to sustain. Not least, the government’s prediction for productivity growth seems unrealistic. It posits that between 2016 and 2020 the growth in Japan’s total factor productivity, that is, the efficiency with which labour and capital are used, will leap from 1% a year to 2.2%, the level that prevailed during the go-go 1980s. The revitalisation scenario implies a series of deep reforms in the labour market, health care and other areas. Yet there are few signs of such radical change except in the fields of corporate governance and farming. Elsewhere, says Robert Feldman of Morgan Stanley, not nearly enough structural reform is under way to raise productivity growth in the way the government promises. Meanwhile its forecasts of bumper tax receipts (Mr Abe’s advisers say that they will prove much higher even than in the revitalisation scenario, actually bringing the budget into surplus by 2020) put it at sharp odds with the IMF, which says that over-optimistic assumptions in the revitalisation scenario risk “harming confidence in the authorities’ ability to restore fiscal sustainability”.

Certainly, Mr Abe wants to avoid making spending cuts that are politically difficult before his government’s term is up in 2018. Nor does he want even to cap future outlays—not least because he will want to ensure plenty of stimulus to offset the contractionary effect of the second tax rise. Mr Abe will try to rein in costs in health care, by encouraging wider use of generic drugs, for instance. But bolder steps, such as means-testing pensions, raising the retirement age or dealing with the surging cost of end-of-life care, are to stay on the drawing board for now.

That will bring further disapproval from the central-bank governor, Haruhiko Kuroda, who thinks that the government is not doing enough to bring down the budget deficit. The government remains defiant. Pooh-poohing the IMF, one of Mr Abe’s advisers bluntly says that the fund is “hardly ever right in its predictions, and we don’t want to follow their advice.”