IMF Official Backs Kishida's Plan to Compile Extra Budget

Politics Economy

Washington, Oct. 14 (Jiji Press)--Petya Koeva Brooks, a senior official of the International Monetary Fund, has signaled her support for Japanese Prime Minister Fumio Kishida's plan to compile a fiscal 2021 supplementary budget.

Kishida, who took office Oct. 4, has indicated his plan to compile an extra budget for the fiscal year to March 2022 if he is re-elected prime minister after the Oct. 31 election for the House of Representatives, the all-important lower chamber of the Diet, Japan's parliament.

It is "appropriate" for Japan to put near-term priority to controlling the novel coronavirus pandemic and cushioning its economic impact, "including through a new fiscal stimulus package," Brooks, deputy director of the IMF's Research Department, told Jiji Press in an interview.

Both fiscal spending and monetary accommodation are necessary until there are "really good signs" of the economy showing a firm recovery, she said. Brooks also said that Japan would need to scale back stimulus measures and recalibrate its fiscal plan once the economy returns to normal.

Concerns are growing over a potential default by Chinese property developer Evergrande Group. Chinese authorities have tools and ability to "react appropriately" if there are signs of "systemic financial stress" in China, Brooks said.

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