IMF urges Japan to take bold action on reforms, debt mess

some14someMay. 24, 2015 - 08:03AM JST

IMF urges Japan to take bold action on reforms, debt mess

what could be bolder than "Abenomics?"

I have been saying this for years as you know.

Japan needs to reduce Public Spending by cutting non productive public servants who are on government payrolls that includes politicians. They need to go.

Also you need to overhaul Japanese National Health care and Long Term care. I am sorry to tell you the quality of health care here is going down the hill and not updating with the rest of world. I visited some nursing homes in Tokyo and saw how bad these facilities are. . As you know your government has been spending money for elsewhere including airports, cultural centers, but you voters keep electing these stupid politicians who are irresponsible for decades.

So choice is up to you all Japanese citizens what you want to change for future of Japan.

Like 2020 now for a primary budget balance? And, resepctfully, Guy, anyone who denies that is simply ignoring the obvious.

No, anybody who claims Japan will run a primary surplus at any time in the future is living in an imaginary world that does not exist. A primary surplus requires the private sector to either increase its debts or run down its savings, there is no other place for the "surplus" money to come from. Japan's problem (which is now the problem in all countries, Japan is just where the problem showed up first) is that the private sector has hit the debt saturation point and is unable to increase its debt load. Meaning that a primary surplus is a mathematical impossibility, unless the public agrees to impoverish itself. Claiming that the economic problems are caused by public debt when the issue is private debt, and then pursuing policies that will not work to reduce this allegedly "dangerous" public debt is guaranteed to make the economic situation worse, not better.

The usual nonsense from the IMF.

Respectfully, everything the IMF is saying is worth listening to, especially since much of it has been said by both BOJ officials as well as Finance Ministry officials, as recently as this week:

Japan needs “bold action” on revamping its economy and improving its precarious national finances, the International Monetary Fund says in its latest assessment of the world’s third-largest economy.

“Risks to the outlook are to the downside,” the IMF said in the report Friday, warning that weak demand and incomplete reform policies could lead to “either stagnation or stagflation,” the latter a predicament of high prices, low growth and high unemployment.

It said doubts about Japan’s “long-term fiscal sustainability” — whether it can pay off its huge debt — could rise if investors lose confidence. Under such a scenario, now ultra-low interest rates on government bonds could shoot up, straining Japan’s ability to support debt that is approaching 250 percent of its GDP, the highest level among industrialized countries.

By making “overly optimistic” assumptions about growth prospects, Japan may be limiting its motivation to carry out other structural changes needed to get its finances back in order, the report said.

In fact, the last point is almost verbatim what the Finance Ministry said just days ago, and which the BOJ promptly ignored and announced on Friday that things are "looking up." You cannot get people to "bite the bullet", which everyone knows Japan must do at some point, when you keep telling them everything is great. Abe and Kuroda have done a horrible job of creating any urgency, since they are too busy trying to find numbers that make Abenomics look successful, as well as moving target dates back, further and further. Like 2020 now for a primary budget balance? And, resepctfully, Guy, anyone who denies that is simply ignoring the obvious."

One can always rely on the IMF to repeat parrot fashion what all and sundry all ready know. You would have thought the IMF would have enough on there plate with the Greek debacle heralding a messy endgame for the Euro obviously not.

Scary stuff, “I believe that banking institutions are more dangerous to our liberties than standing armies.” –Thomas Jefferson

The IMF have nothing to say as Japan has an i ternal debt not external and its local investors are fine eith Japans path... The IMF is confused... its The USA and china that are of concern as both have huge external debts...If tge USA and China paid their huge monetary debt they owe Japan first tgen the IMF may have something to say perhaps.

The usual nonsense from the IMF. Create a bogus scenario where interest rates "shoot-up" because "investors lose confidence", then prescribe fantasy solutions for the fantasy problems. Why will they lose confidence? Uh, because they might. Why would it matter if they did lose confidence? Uh, because interest rates would go up (actually no they wouldn't). So why haven't they already lost "confidence" and why haven't interest rates already "shot-up"? We have no idea, but trust us, they might.

As for a "credible plan to improve its public finances" all Japan needs to do is immediately eliminate the idiotic consumption tax that robs the Japanese public of purchasing power, and which has resulted in untold trillions of yen of lost economic activity since it was introduced. All for zero economic purpose. GDP would soar and the GDP to debt ratio would plummet. But that would require sanity and competence from the government, so don't hold your breath.

IMF urges Japan to take bold action on reforms, debt mess

what could be bolder than "Abenomics?"

The IMF said the central bank should be prepared to expand its stimulus.

This shows the IMF understands nothing. Reforms? Probably they only want to push Japan joining TPP.