TOKYO (AFP) ― Japan’s central bank chief has forecast victory in his battle against stubborn deflation that has sapped growth for years, but expressed impatience over the pace of Premier Shinzo Abe’s policy blitz aimed at jump-starting the long-laggard economy.
Bank of Japan Gov. Haruhiko Kuroda said stimulus measures had boosted economic activity and produced durable inflation.
But he warned that Abe’s government needed to step up its campaign for deeper, structural reforms that go beyond monetary policy to achieve more sustainable longer-term success.
Unless Abe acts swiftly, “the real growth rate may be disappointing,” Kuroda said in an interview published in The Wall Street Journal Saturday.
“That is not good for the economy, not good for the society.
“Implementation is key, and implementation should be swift,” Kuroda said.
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Bank of Japan Gov. Haruhiko Kuroda. (Bloomberg) |
Kuroda projected confidence that Japan was on track to hit his target of two percent inflation by next year, putting an end to years of deflation depressing the world’s third largest economy.
The bank’s stimulus, similar to the U.S. Federal Reserve’s asset-buying plan known as quantitative easing, aims to inject massive sums of money into the financial system to spur growth and reach a 2 percent inflation target by next year.
This easing is a cornerstone of Abe’s policy blitz dubbed Abenomics which called for big government spending, looser monetary policy and deregulation as the prescription for jump-starting growth.
Critics, however, say Abe has yet to follow through on structural reforms to the economy, including shaking up labor markets, signing free-trade deals and bringing more women into the workforce.
