OECD Urges Japan to Increase Consumption Tax and Address Economic Challenges

• Japan’s economy has recovered from the COVID-19 pandemic but faces challenges from weak global trade prospects
• Policy should focus on fiscal sustainability, productivity growth, and addressing the impacts of population ageing
• GDP is projected to grow steadily in the coming years, driven by domestic demand
• Inflation is expected to slowly decrease and stabilize at 2%
• Japan should gradually increase the consumption tax to boost revenues
• Rebuilding fiscal space and ensuring debt sustainability should be prioritized
• Containing spending growth requires health and long-term care reforms

Source: oecd.org

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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