Japan’s absence of “concrete reform
plans” for the nation’s finances may be contributing to deflation and sluggish
economic growth by discouraging spending by the public, central bank Governor
Masaaki Shirakawa said.
Consumers may be
limiting spending “on concerns over future fiscal developments,” Shirakawa said
in remarks prepared for an event in Washington yesterday.
This may be “one factor behind
sluggish economic growth and mild deflation,” he
said.
Masaaki Shirakawa,
governor of the Bank of Japan. Photographer: Haruyoshi Yamaguchi/Bloomberg.
The Bank of Japan is
under pressure from lawmakers to step up its attack on more than decade-long
deflation as the government seeks to sustain a recovery from last year’s
earthquake and economic contraction. Shirakawa has pledged to extend “powerful”
easing until a 1 percent price goal is in sight and his policy board next meets
on April 27.
The nation’s borrowings
will exceed 1,000 trillion yen ($12.4 trillion) for the first time in this
fiscal year, the Finance Ministry projects, while the Organization for Economic
Cooperation and Development predicts Japan’s public debt will reach 219
percent of gross domestic product.
Shirakawa said yesterday
that stability in Japanese government bond yields shows investors’ expectations
that “fiscal soundness will be restored through structural reforms in both the
economic and fiscal areas.”
“At the moment, such expectations are not firmly backed by concrete
reform plans,” he said.
( this news from bloomberg.com. )
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