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

MNI (London)
     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$$$,M$J$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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