[Washington 17th Reuters]-International Monetary Fund (IMF) Vice Managing Director Mitsuhiro Furusawa (former treasurer) shows in the interview with Reuters that the Japanese economy is "relatively well" On the other hand, concerning the effects of the consumption tax increase, he said, “If the risks become obvious and economic growth declines more than expected, additional financial measures can be taken.”
According to the World Economic Outlook (WEO) announced on the 15th, the IMF forecasts that the growth rate for 2019 will be revised down to 3.0%, which is expected to be low since the financial crisis of 2008-09. Japan's growth rate is expected to decelerate from 0.9% this year to 0.5% next year, partly due to the tax rate hike.
Vice Managing Director Furusawa pointed out that the consumption tax hike is "the tax increase is necessary as the IMF has said before". The IMF's recommendation that the consumption tax rate should continue to be raised step by step is "still unchanged" and insisted that it should be increased to 15% in the future.
Regarding the slowdown of the Chinese economy, he expressed his view that “there are two factors: the impact of trade friction and the impact of tightening regulations to deal with debt problems,” and “trade friction was an unintended factor. "Regulatory tightening was an intended measure to move the Chinese economy to a more sustainable growth trajectory," he said.
The IMF expects China's growth rate to slow down from 6.1% this year to 5.8% next year.
As for the fact that Asian central banks are moving to cut interest rates, while assessing that easing monetary policy in Asian countries has helped mitigate growth slowdown, “As debt continues to grow in emerging countries, including Asia,” he said, “At the same time as mitigation continues, we must pay close attention to the various impacts of such policies.”
(Japanese article creation Yoshida Shida editor: Hitoshi Ishida)