IMF Warns Japan of COVID-19 Impact, Price Rises

Politics Economy

Washington, Jan. 27 (Jiji Press)--The International Monetary Fund on Thursday cited uncertainty reflecting the novel coronavirus pandemic, as well as potentially higher prices, as risk factors for the Japanese economy.

"The Japanese economy is recovering" from the COVID-19 crisis thanks to "strong policy support and high vaccination levels," the IMF said in an annual review report for the country's economy. The recovery is "expected to strengthen in 2022," the report said, while noting that the balance of risks is "tilted to the downside."

At the same time, the IMF called on the administration of Japanese Prime Minister Fumio Kishida, whose policy goals include the creation of a new form of capitalism, to pursue both economic growth and fiscal reconstruction.

"The unusual uncertainty around the pandemic poses downside risks," the Washington-based institution said, noting that "strict containment measures may be needed to deal with the omicron variant, and the recovery in services consumption may be delayed" as a result.

Growth in consumer prices in Japan remains below the Bank of Japan's 2 pct target, the IMF said. But it added that inflation momentum is "expected to pick up," spurred by higher import prices and domestic demand.

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