And now the International Monetary Fund’s second-ranking official is warning that Japan’s economy, and that of the world, is poised on the brink.
International Monetary Fund First Deputy Managing Director David Lipton welcomed the Bank of Japan’s new policy framework as a boost to its credibility, but called for more vigorous fiscal and structural policies to reflate a fragile economic recovery.
Lipton also shrugged off the view that monetary policy was nearing its limit as a means to revive economies across the globe, stressing that central banks must be open to new ideas to help spur growth.
“Central banks have to always be ready to do whatever they can based on the realities they face,” Lipton told Reuters on Saturday. “The BOJ has been an example of imaginative approaches.”
The BOJ last month switched its policy target to interest rates from the pace of money printing, after years of massive asset purchases failed to jolt the economy out of stagnation.