Finance Minister Masajuro Shiokawa said Friday he will counter negative views expressed by the International Monetary Fund regarding Japan’s economic prospects when he meets with his Group of Seven counterparts in Washington.
“At the G7 meeting, I plan to strongly oppose recent views on Japan expressed by the IMF and foreign observers,” Shiokawa told a regularly scheduled news conference.
The IMF’s World Economic Outlook report, released Thursday, says Japan’s economy will contract sharply this year and post a slight rebound in 2003.
The report says that only a government-led cleanup of the debt-saddled banking sector can lead to a sustainable recovery.
Shiokawa emphasized, however, that bright prospects are evident in Japan’s economic outlook and that the nation’s bad-loan problems will be eradicated.
Shiokawa described an IMF suggestion that Japan further relax its monetary policy and compile a supplementary budget to prevent its economy from slipping further behind those of other G7 nations as “interference in domestic affairs.”
He added that the suggestion is inconsistent with a pledge by the administration of Prime Minister Junichiro Koizumi to limit the issuance of government bonds.
Shiokawa said Koizumi had given him the green light to issue counterarguments at the G7 meeting.
The finance minister made the remarks before departing for Washington to attend a two-day meeting of finance ministers and central bank chiefs from Britain, Canada, France, Germany, Italy, the United States and Japan.
G7 finance ministers and central bank governors were scheduled to gather Friday evening in Washington.
At a separate news conference, Heizo Takenaka, state minister in charge of economic and fiscal policy, also criticized the IMF’s call for an extra budget.
“I cannot believe it is a professional diagnosis, (the suggestion) misses the point,” Takenaka said.
He also questioned the suggestion that government borrowing be increased at a time when Japanese government bonds are being downgraded by U.S. credit rating agencies.
Shiokawa meanwhile said he would lodge a protest with Standard & Poor’s Corp., a U.S. credit-rating agency, over its recent downgrading of Japan’s long-term debt rating.
“I wonder what data they used to put Japan’s rating at ranks lower than developing economies,” he said.
He went on to question S&P’s evaluation of Japan’s external claimable assets, which total $1.3 trillion, and its foreign currency reserves of more than $400 billion.
On Monday, S&P cut Japanese sovereign ratings to AA-minus with a negative outlook, putting Japan at the bottom of the credit-rating league in the G7 leading economies.
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