Japan: Staff Concluding Statement of the 2026 Article IV Mission
you are currently viewing:Japan: Staff Concluding Statement of the 2026 Article IV MissionFebruary 17, 2026--The Japanese economy has displayed impressive resilience in the face of global shocks and is experiencing a sustained period of output growing above potential. Domestic demand has been robust and unemployment remains low. After three decades of near-zero inflation, prices have been growing faster than the BOJ's 2-percent target for three and a half years. While nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power. Japan continues to face challenges from its aging population and high public debt. With the output gap positive and inflation expected to converge to target from above, fiscal and monetary policies should be calibrated to sustain price and output stability, while rebuilding fiscal buffers. Reforms to the labor market are needed to ensure that labor market tightness translates into sustained real wage gains. RECENT DEVELOPMENTS, OUTLOOK, AND RISKS Growth has been resilient, recovering to exceed potential in the first half of 2025, but has started to moderate. Source: imf.org |
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