Japan is falling short of its economic targets and needs to reload the "three arrows" of "Abenomics" to support higher wages and labor-market reforms, the International Monetary Fund said in a report published Monday.
"Under current policies, the high nominal growth goal, the inflation target, and the primary budget surplus objective all remain out of reach within the timeframe set by the authorities," the fund's staff wrote in a report at the conclusion of annual talks in Tokyo. "Monetary and fiscal policies in isolation cannot achieve the inflation target in the envisaged timeframe."
Abe came into power in 2012 championing a three-pronged strategy of bold monetary easing, flexible fiscal policy and a growth strategy to boost the competitiveness of the world's third-largest economy. While the strategy has weakened the yen and boosted stocks, the 2 percent inflation target has been elusive.