The chief of the International Monetary Fund believes Japan will be able to revitalize its economy enough to accommodate the next consumption tax hike and that the country should continue efforts to empower women.

Christine Lagarde forecast that Japan’s economy is likely to return to expansion at a pace faster than 3 percent in the July-September period but hinted at a reduction to the global growth estimate for this year amid growing uncertainties.

“Our forecast of at least 3 percent for Q3 should give the authorities sufficient comfort to increase” the consumption tax rate to 10 percent in October next year as scheduled, Lagarde said last week in an interview at the IMF headquarters in Washington.

She will arrive in Japan on Thursday to attend the World Assembly for Women in Tokyo and meet with Prime Minister Shinzo Abe.

Abe’s team plans to decide by the end of this year on whether to raise the sales tax after weighing factors such as recent data that showed Japan suffered its worst economic setback in more than five years in the second quarter of this year.

Lagarde struck an optimistic tone regarding the overall recovery of the Japanese economy but called for improvement of the growth strategy, the third component of Abe’s economic measures following aggressive monetary easing and massive fiscal spending.

“We are positive about the developments, but I also believe that the ‘third arrow’ of ‘Abenomics’ could be developed some more,” she said.

The first female leader of the IMF in the organization’s 70-year history praised Abe for increasing the number of female members in his 18-minister Cabinet from two to five in last week’s reshuffle.

“It’s good. I’m sure that once you start on that road, you have to continue,” Lagarde said. “I have full confidence that this is only the beginning of the journey.”

Lagarde expressed hope that Japan will achieve its goal of raising the proportion of women in leadership positions in both the public and private sectors to at least 30 percent by 2020.

“When you have to follow such a difficult path to improve the situation (surrounding women), indicative targets are useful,” she said.

As measures aimed at helping to encourage women’s participation in the economy, Lagarde called on Japan to increase child care facilities through deregulation and review an income tax deduction for dependent spouses that is sometimes criticized for robbing women of the incentive to work.

“I know that Japanese women are talented, competent, well-trained and that they have good education, that they are solid and conscientious,” she said.

On the global economy, Lagarde hinted the IMF may revise the growth estimate for this year downward from 3.4 percent, released in July, due to growing uncertainties from factors such as the war in Ukraine.

“I would only say that it will be a small 3 percent. A small 3 percent means it will be under 3.5 percent. We will not revise upward, that is for sure,” she said.

Lagarde said Japan is likely to maintain the post of deputy managing director of the IMF after Naoyuki Shinohara steps down next March, saying “I have every reason that that should be the case.”

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