G-8 Backs Abenomics,while Concerned about Japan's Fiscal Health

Belfast, Northern Ireland, June 17 (Jiji Press)--Leaders of the Group of Eight major powers, at their meeting Monday, threw their support behind Japanese Prime Minister Shinzo Abe's "Abenomics" economic policy mix along with policy actions by other leading economies. "Global economic prospects remain weak, though downside risks have reduced thanks in part to significant policy actions taken in the U.S., euro area and Japan," the G-8 leaders said in a statement issued after the first session in their two-day summit at Lough Erne, a Northern Ireland resort. "Japan's growth will be supported by its near-term fiscal stimulus, bold monetary policy and recently announced strategy for promoting private investment," said the statement on the global economy. But it quickly added the country "will need to address the challenge of defining a credible medium-term fiscal plan." The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States observed in the statement that the eurozone "remains in recession," while the U.S. recovery "is continuing and the deficit is declining rapidly." "Promoting growth and jobs is our top priority," they noted. Abe explained Japan's growth strategy to revitalize private-sector investment--the "third arrow" of Abenomics--to his G-8 colleagues, Japanese government officials with access to the summit meeting said. The prime minister also underlined his positive stance toward medium- to long-term fiscal reforms, saying Japan will raise the consumption tax in April next year if the economic and other situations allow the move, according to the officials. After the first-day session, Abe told reporters that Japan's economic policy has won support from the rest of the G-8 nations. Informed sources said, however, concerns were expressed over aggressive monetary easing by Japan and the United States, such as the potential danger of competitive currency devaluation and difficulties in tapering off the monetary stimulus. German Chancellor Angela Merkel is believed to be the one who expressed the concerns, the sources said. As a result, the G-8 leaders stressed in the statement that monetary policy "should continue to support the recovery and be directed toward domestic price stability." On Tuesday, the leaders will discuss measures against terrorism and tax evasion by multinational companies. Following the end of their two-day talks, the leaders plan to adopt a joint statement that will also reflect the outcome of their discussions on international affairs. END