Japan must act immediately to improve its fiscal health as the risks of natural disasters mount and social security costs continue to increase, according to the International Monetary Fund.
¡°There is limited space today in Japan to address shocks,¡± warned Nada Choueiri, the IMF¡¯s Japan mission chief in an interview in Tokyo on Thursday. ¡°Japan needs to plan today for where to find the space to accommodate¡± fiscal spending needs without increasing its deficits, she added.
The IMF¡¯s warning comes as Japan ramps up spending to address a broad spectrum of needs ranging from bolstering national defense to efforts to raise the birth rate. That¡¯s happening just as its financing costs are inching higher as a result of the Bank of Japan¡¯s rate hikes over the last year. Japan already has the largest public debt burden among developed nations.
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