- The IMF warns Japan against cutting its consumption (sales) tax, citing risks to fiscal stability and increased fiscal risks.
- Rising borrowing costs, driven by expected Bank of Japan rate hikes, will make debt servicing more expensive.
- Prime Minister Takaichi is considering a temporary suspension of the sales tax on food, but the IMF urges any tax relief to be targeted, temporary, and budget-neutral.
- The IMF recommends Japan adopt a credible medium-term fiscal framework with clear targets, as public debt and interest payments are projected to rise.
- Japan’s debt remains the highest among major economies, leaving it vulnerable to economic shocks.
Source: japantimes.co.jp
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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