LONDON – Bank of Japan Gov. Haruhiko Kuroda told the World Economic Forum’s annual Davos meeting that it will take time before structural reforms in Japan begin to produce positive effects.
Since Prime Minister Shinzo Abe launched his “Abenomics” reflationary policy mix two years ago, the rate of female participation in Japan’s national workforce has risen to a record high, Kuroda said Saturday, although it remains far lower than in OECD member countries.
While noting that structural reforms are “very important in the long run” and have “significant impact on growth potential,” Kuroda said they “take time” to bear fruit.
“So I hope people are slightly more patient,” he told the gathering in the Swiss resort town.
On growing concerns about the global economy, Kuroda said such fears are “a bit exaggerated” and predicted that falling oil prices and the European Central Bank’s recent decision to start quantitative monetary easing will improve the global economic outlook.
The free-falling price of oil “could accelerate the global economic growth,” he said, while the ECB’s monetary decision is “certainly quite significant.”
Kuroda said he is not worried about further depreciation of the euro stemming from the ECB’s decision. Like Japan’s central bank, the ECB does not target exchange rates, he noted.
He said the launch of quantitative easing means the eurozone economy “could recover strongly” and deflationary pressure “could be eradicated,” adding that would be “great for the global economy.”