IMF calls Japanese government to spend more

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The Japanese economy is likely to grow less rapidly than expected this year. The International Monetary Fund (IMF) has lowered the country’s growth estimate to 0.8 percent, from 0.9 percent previously. It was the third time this year that the fund lowered the estimate.

With the lower estimate, the institute points among other things to the slowdown in the global economy. According to the IMF, the Japanese government should not economize in the coming two years, given the economic situation. It is precisely more expenses such as subsidies to employees in care and childcare that are needed. That would support growth and inflation in the short term, says new IMF boss Kristalina Georgieva.

In terms of monetary policy, there is increasing pressure on the Japanese central bank to come up with easing measures, according to the IMF. The fund gives as examples the new support package from the ECB and interest rate cuts at the Federal Reserve. The target of inflation of 2 percent could also be revised.

About the author

Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at [email protected]

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