IMF urges Japan to speed up structural reform

TOKYO, June 19 The International Monetary Fund on Monday urged Japan to avoid withdrawing fiscal policy stimulus and to keep monetary policy accommodative to accelerate growth and achieve higher inflation.

"We're comfortable with the stance of (BOJ) monetary policy".

IMF First Deputy Managing Director David Lipton made the comments during a press conference here when he presented the IMF's annual evaluation of Japan's economy, reports Efe news.

The IMF expects Japan's growth to continue in 2017, but stressed it could weaken in 2018 "if fiscal stimulus fades as now planned", adding that fiscal stimulus could support growth through "higher consumption and investment".

"A comprehensive policy package-built around macro-critical structural reforms and income policies-is needed to make the most of monetary accommodation and available fiscal space", the IMF said.

The IMF said the bank should carefully calibrate its yield curve policy, if downside risks materialize, to provide additional monetary easing. Also it added that the fiscal rate might become contractionary in 2018-2020, due to the scheduled consumption tax hike in October 2019.

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