IMF URGES JAPAN TO ‘RELOAD’ ABENOMICS

Tokyo, June 20: The International Monetary Fund on Monday said the Japanese government’s quest to revitalise its economy faces a long slog in the absence of ‘bold’ structural reforms, and urged Tokyo to move income policies and labor market reform to the forefront.

The global lender called for a more flexible monetary policy framework with the Bank of Japan abandoning a specific calendar date for achieving its 2% inflation target.

“Under current policies, the high nominal growth goal, the inflation target, and the primary budget surplus objective all remain out of reach within the timeframe set by the authorities,” the IMF said in a statement after “Article 4” annual consultations on economic policy with Japan.

The IMF’s sober assessment comes as the effectiveness of PM Shinzo Abe’s reflationary policies dubbed Abenomics face renewed doubts as inflation has ground to a virtual halt and growth has remained anaemic.

While unprecedented monetary expansion and fiscal stimulus met with some initial success, Abe’s ‘third arrow’ of structural reforms have been slow to make headway. “Abenomics has made progress in revitalising Japanese economy,” David Lipton, the first deputy MD of the IMF, said in Tokyo.

Meanwhile, BoJ governor Haruhiko Kuroda acknowledged for the first time that the centralbankfailedtohititsinflation target in the two-year timeframe set in 2013. Reuters