MNI POLICY: IMF Ups Japan 2020 GDP At 0.7% Vs Oct 0.5% F'cast

     TOKYO (MNI) - The International Monetary Fund on Monday upgraded its

forecast for Japan's GDP growth in 2020 to 0.7% from October's 0.5%, due partly

to the government stimulus measures.

     Japan's GDP forecast in 2019 was revised up to 1.0% from 0.9% made in

October, while the IMF left its outlook for 2021 unchanged at 0.5%.

     "The upward revision to estimated 2019 growth reflects healthy private

consumption, supported in part by government countermeasures that accompanied

the October increase in the consumption tax rate, robust capital expenditure,

and historical revisions to national accounts," the IMF said in the latest World

Economic Outlook

     "The upgrade to the 2020 growth forecast reflects the anticipated boost

from the December 2019 stimulus measures. Growth is expected to decline to 0.5

percent (close to potential) in 2021, as the impact of fiscal stimulus fades,"

the IMF added.

     "Barring where private demand is very weak, high debt countries should

generally consolidate to prepare for the next downturn and looming entitlement

spending further down the road," the IMF warned.

     "With policy rates in many advanced economies close to the effective lower

bound and long-term interest rates at low (in some cases, negative) levels, the

room for monetary policy to combat further growth declines is limited," it

noted, adding that "policymakers would be well-placed to counter the next

downturn if they prepare in advance a contingent response."

     The IMF lowered the global GDP forecast in 2020 and in 2021 to 3.3% and to

3.4%, respectively, from the 3.4% and 3.6% made in October.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MAJDS$,M$A$$$,M$J$$$]