ID :
163640
Thu, 02/24/2011 - 06:51
Auther :
Shortlink :
http://m.oananews.org//node/163640
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IMF Concerned about Lack of Progress in Japan's Fiscal Reform
Washington, Feb. 23 (Jiji Press)--The International Monetary Fund showed its concern about a lack of progress in Japan's fiscal reform efforts in a report made public on Wednesday.
A downside risk to global economic recovery "stems from insufficient progress in developing medium-term fiscal consolidation plans in the United States and Japan," the international lending agency said in the report, which was submitted to the Paris meeting of the Group of 20 finance ministers and central bank heads last week.
The IMF said Japan projects a deficit reduction of only one pct of gross domestic product in 2012 after a modest cut planned for the current year.
Standard & Poor's downgrade of Japan's sovereign debt rating last month highlighted "increasing concerns over medium-term fiscal sustainability," it pointed out.
As for the euro area periphery, the IMF said financial sector strains resulting from sovereign and banking sector fragilities "represent a significant risk to recovery in the region and possibly beyond."
In emerging economies, overheating and inflationary pressures are rising, the IMF said, expressing worries about the negative impact of rises in food, oil and other commodity prices particularly on low-income countries.
The food price gains were "driven mostly by weather-related supply shocks" while the higher oil and raw materials prices reflected "stronger-than-anticipated demand growth" notably in China and member countries of the Organization for Economic Cooperation and Development, the IMF observed.
"Supportive monetary policies have kept interest rates (and inventory financing costs) low, with a depreciation of the dollar also contributing to higher prices," it added.
On currencies, the IMF said the real effective values of the euro and the yen "are broadly in line with medium-term fundamentals," while the dollar "remains on the strong side of fundamentals."
A downside risk to global economic recovery "stems from insufficient progress in developing medium-term fiscal consolidation plans in the United States and Japan," the international lending agency said in the report, which was submitted to the Paris meeting of the Group of 20 finance ministers and central bank heads last week.
The IMF said Japan projects a deficit reduction of only one pct of gross domestic product in 2012 after a modest cut planned for the current year.
Standard & Poor's downgrade of Japan's sovereign debt rating last month highlighted "increasing concerns over medium-term fiscal sustainability," it pointed out.
As for the euro area periphery, the IMF said financial sector strains resulting from sovereign and banking sector fragilities "represent a significant risk to recovery in the region and possibly beyond."
In emerging economies, overheating and inflationary pressures are rising, the IMF said, expressing worries about the negative impact of rises in food, oil and other commodity prices particularly on low-income countries.
The food price gains were "driven mostly by weather-related supply shocks" while the higher oil and raw materials prices reflected "stronger-than-anticipated demand growth" notably in China and member countries of the Organization for Economic Cooperation and Development, the IMF observed.
"Supportive monetary policies have kept interest rates (and inventory financing costs) low, with a depreciation of the dollar also contributing to higher prices," it added.
On currencies, the IMF said the real effective values of the euro and the yen "are broadly in line with medium-term fundamentals," while the dollar "remains on the strong side of fundamentals."
