Japan: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Japan

IMF Staff Country Reports, February 10, 2020

Source details

Canonical URL: Japan: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Japan

The rapid aging and shrinking of Japan’s population has become central to macroeconomic policies and outcomes.
The consultation centered on the macroeconomic effects of Japan’s demographics.
Mutually reinforcing policies are needed to:
- lift current and expected inflation,
- stabilize public debt,
- raise potential growth.
Underlying growth is expected to remain resilient but will be increasingly challenged by:
- slowing external demand,
- intensifying demographic headwinds.
Growth in domestic demand is being eroded by the weaker external environment.
Frontloading of private consumption ahead of the October 2019 consumption tax rate increase appears to have been smaller than in 2014.

Implement mutually reinforcing policies to:
- support a lift in current and expected inflation,
- stabilize public debt dynamics,
- raise potential growth through structural reforms.
Address demographic challenges (aging and population shrinkage) as a central macroeconomic priority.

Subject areas: Aging, Consumption taxes, Fiscal policy, Inflation, Labor, Population and demographics, Prices, Taxes
Keywords: Aging, Asia and Pacific, BOJ's core-core inflation, Consumption taxes, core inflation, core inflation forecast, CPI headline inflation, CR, Global, Inflation, ISCR, Japan, Japan-EU trade agreements, stimulus package