Japan does not intend to change course on its fiscal reconsolidation policy just because of foreign pressure to boost domestic demand, a senior Finance Ministry official said Sept. 16.
The issue of reducing its huge fiscal deficit is of the greatest importance for the government, and its basic position is that no measures should be taken to undermine this effort, the official said. “The era in which this country does something due to external pressure is over, and if it is not yet finished, I’d like to put an end to it (this time around)” he said, on condition of anonymity.
The unattributed outburst was taken to be a response to a recent series of remarks from U.S. officials voicing concern about the sluggishness of the Japanese economy, and the rise in the nation’s external surpluses ahead of the G-7 meeting Sept. 20 of finance ministers and central bankers.
The high-ranking official said Tokyo still wants to secure recovery through increased domestic demand, as it has often promised its trading partners, adding that the surge in the surplus has only been evident over the past few months and has not brought about any confusion in the global economy.
He added that economic activity throughout the rest of the year should be monitored before deciding on any possible changes in policy. The official said, however, that while efforts to achieve the government’s forecast of 1.9 percent economic growth for the current fiscal year would still be made, “it would be difficult,” painting a grimmer picture of the economy than has Finance Minister Hiroshi Mitsuzuka.