IMF Says Japan’s Growth Will Not Be as Strong as Forecasted

The International Monetary Fund warned Thursday that Japan’s economy is unlikely to grow as strongly as the government wishes in the medium term due partly to a labor shortage in the graying society.

Prime Minister Shinzo Abe’s government decided last month to aim for a real expansion of 2 percent or more to attain its 2020 fiscal reform goal, but in an annual report on the Japanese economy the IMF said, “Growth is projected to stabilize at around 0.7 percent over the medium-term.”

The IMF urged Japan to adopt “prudent economic assumptions” and show concrete measures to boost revenues and cut expenditures in order to impart further credibility to the fiscal strategy.

In a fiscal and economic policy blueprint adopted June 30, the Japanese government called for increased tax revenues from robust economic growth led by the business sector in order to restore the country’s debt-saddled fiscal health, which is the worst among major industrialized economies.

In an updated version of its World Economic Outlook report, the IMF projected that the Japanese economy will expand an annualized real 0.8 percent in 2015 and 1.2 percent in 2016.

via Mainichi

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza