{ "title": "Press Conference on the Concluding Statement of the 2023 Article IV Mission to Japan", "publication": "IMF News, January 26, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission", "canonical": "https://www.imf.org/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission", "overlayPath": "/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/index.md", "summary": "Press Conference on the Concluding Statement of the 2023 Article IV Mission to Japan", "publishDate": "2023-01-26", "sections": [ { "heading": "Outlook and growth projections", "content": "- Japan is expected to grow at 1.8 percent in 2023, a slight upgrade from 1.6 percent in the October World Economic Outlook.\n- Core inflation has accelerated, recording levels not seen in four decades at 4 percent.\n- The output gap is projected to close in 2023.\n- Consumption of services will be supported by savings accumulated during the pandemic.\n- Exports will rise as order backlogs have risen, supply side constraints eased, and high corporate profits from a depreciated yen and delays in implementing previous projects will support business investment.\n- Global growth is expected to bottom out in 2023 and improve into 2024; China’s reopening and stronger-than-expected growth in the US and Europe contributed to an upgrade for Japan." }, { "heading": "Inflation outlook and monetary policy", "content": "- Primary inflation objective reiterated: reach and durably meet a 2 percent inflation target.\n- Current assessment: inflation peaked recently (4 percent) but is not yet judged durably at the 2 percent target without substantial acceleration in wage growth.\n- Projection: inflation expected to peak in Q1 2023 and then decline, and by the end of 2024 to be slightly below the inflation target.\n- Policy stance recommendations:\n - An overall accommodative monetary policy stance remains appropriate.\n - Shorter-term policy rates should remain unchanged.\n - More flexibility in long-term yields would help better manage risks given increased uncertainty about inflation and could lead to a smoother transition to a neutral monetary policy stance once there is stronger evidence that the inflation target will be durably met.\n - Changes in monetary policy settings should be well communicated." }, { "heading": "Fiscal outlook and recommendations", "content": "- The primary fiscal deficit will stay elevated in 2023 following the adoption of the October 2022 fiscal package.\n- Fiscal policy guidance:\n - Amid the recovery, rising inflation, tighter labor markets and a closing output gap, fiscal support should be withdrawn more quickly and new measures limited and targeted only to vulnerable households.\n - Any additional spending measures should be targeted and come hand in hand with revenue-raising measures.\n - Over the medium-term, growth-friendly and credible fiscal consolidation is necessary to put public debt on a downward path and to rebuild fiscal buffers.\n - Financial support measures should be limited to viable firms.\n- Specific fiscal context and figures:\n - Japan has a very high level of public debt, \"250% of GDP roughly\" (as stated by the Mission Chief).\n- On defense and other spending increases:\n - Any increase in expenditures should be met with an increase in revenues." }, { "heading": "Structural and medium-term policy priorities", "content": "- Labor market and fiscal reforms are warranted to:\n - Raise potential growth.\n - Reduce gender inequalities.\n - Offset the drag from fiscal consolidation.\n- Promote green and digital investment to:\n - Help achieve climate targets.\n - Reap the benefits of the digital economy.\n- Investment priorities noted: important investment needed for the green transformation and digital transformation." }, { "heading": "Risks and uncertainties", "content": "- Inflation outlook carries significant uncertainty with both upside and downside risks.\n- Japan faces unique two-sided risks to inflation; stronger wage growth is critical to sustain a 2 percent inflation rate.\n- Global slowdown risks: slower global demand reduces external demand for export-reliant countries; however, easing energy prices and milder-than-feared winter in Europe have mitigated some risks.\n\nPress Conference, January 26, 2023 — IMF Communications Department; Participants: Gita Gopinath, First Deputy Managing Director; Ranil Salgado, Mission Chief to Japan.\n\n---\n\n\n References\n\n- Gita Gopinath\n- Japan: Staff Concluding Statement of the 2023 Article IV Mission\n- Japan and the IMF\n- IMF Policy Advice -- A Factsheet\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/index.md)", "[Structured JSON version](/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/index.json)", "[Bundle manifest](/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/bundle-manifest.json)", "Published: January 26, 2023", "Japan is expected to grow at 1.8 percent in 2023, a slight upgrade from 1.6 percent in the October World Economic Outlook.", "Core inflation has accelerated, recording levels not seen in four decades at 4 percent.", "The output gap is projected to close in 2023.", "Consumption of services will be supported by savings accumulated during the pandemic.", "Exports will rise as order backlogs have risen, supply side constraints eased, and high corporate profits from a depreciated yen and delays in implementing previous projects will support business investment.", "Global growth is expected to bottom out in 2023 and improve into 2024; China’s reopening and stronger-than-expected growth in the US and Europe contributed to an upgrade for Japan.", "Primary inflation objective reiterated: reach and durably meet a 2 percent inflation target.", "Current assessment: inflation peaked recently (4 percent) but is not yet judged durably at the 2 percent target without substantial acceleration in wage growth.", "Projection: inflation expected to peak in Q1 2023 and then decline, and by the end of 2024 to be slightly below the inflation target.", "Policy stance recommendations:", "The primary fiscal deficit will stay elevated in 2023 following the adoption of the October 2022 fiscal package.", "Fiscal policy guidance:", "Specific fiscal context and figures:", "On defense and other spending increases:", "Labor market and fiscal reforms are warranted to:", "Promote green and digital investment to:", "Investment priorities noted: important investment needed for the green transformation and digital transformation.", "Inflation outlook carries significant uncertainty with both upside and downside risks.", "Japan faces unique two-sided risks to inflation; stronger wage growth is critical to sustain a 2 percent inflation rate.", "Global slowdown risks: slower global demand reduces external demand for export-reliant countries; however, easing energy prices and milder-than-feared winter in Europe have mitigated some risks.", "[Gita Gopinath](https://www.imf.org/en/about/senior-officials/bios/shirin-hamid)", "[Japan: Staff Concluding Statement of the 2023 Article IV Mission](https://www.imf.org/en/news/articles/2023/01/25/japan-staff-concluding-statement-of-the-2023-article-iv-mission)", "[Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/index.md", "json": "/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/index.json", "bundleManifest": "/en/news/articles/2023/01/27/tr012623-japan-press-conference-concluding-statement-2023-article-iv-mission/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T01:49:17.538Z" }