The Japanese government should tackle fiscal consolidation because of the diminishing results of pump-priming measures taken so far and the ballooning public debt, the Bank for International Settlements said Monday.
"While rising levels of public debt in Japan imply that overall fiscal stimulus will have to be more restrained in the future, a rebalancing of expenditures could yet pay big dividends," the BIS said in its 70th annual report, released at its annual general meeting in Basel, Switzerland.
"Cutting back on the overdeveloped public investment side and increasing expenditure on the underdeveloped social safety net could help preserve needed confidence," the report said.
Japan's public investment is triple the average of 10 major industrial countries, the report said.