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| People wearing face masks walk in Osaka's Shinsekai area on Jan. 21, 2022, amid the coronavirus pandemic. (Photo by= Kyodo) |
[Asia News = Reporter Reakkana] WASHINGTON: The International Monetary Fund said Thursday the coronavirus pandemic is unlikely to have "significant scarring effects" on Japan due to substantial fiscal and monetary support, but the world's third-largest economy needs to come up with post-pandemic policies to ensure sustainable growth as its population shrinks, Kyodo reported.
The IMF also said in an assessment of Japan's economic developments and policies that there is still "room" to raise revenues such as through consumption tax rate hikes, with the country's tax revenues as a percentage of gross domestic product relatively low among the Group of Seven industrialized nations. The Washington-based institution holds regular consultations with member countries, usually annually. The pandemic, however, has disrupted the schedule, making the latest report on Japan the first since February 2020.
In its preliminary findings following the consultations, the IMF estimated that Japan's growth will accelerate to 3.3 percent in 2022 following a 1.6 percent rise in 2021, on the back of continued strong fiscal support, a high COVID-19 vaccination rate and the easing of pandemic-related global supply constraints. Overall, the "scarring effects" from the health crisis will be limited in Japan due to the significant support provided to companies and households, Ranil Salgado, assistant director of the IMF's Asia and Pacific Department who led the IMF's mission to Japan, said in an online press conference.
