INTERVIEW: IMF Official Warns Japan of Debt Deterioration Amid Future Shock

By Adriana Reinecke

Washington, Oct. 23 (Jiji Press)--If Japan faces a significant economic shock in the future, the pace of deterioration in its debt levels could exceed that seen during the COVID-19 pandemic, senior IMF official Vitor Gaspar warned in a recent interview with Jiji Press.

Gaspar, who heads the International Monetary Fund's Fiscal Affairs Department, went on to emphasize the urgent need for fiscal consolidation in light of the debt risk.

The IMF predicts that Japan's debt will exceed 250 pct of its gross domestic product this year before gradually decreasing to 245 pct by the end of the decade.

Gaspar noted that Japan's debt-to-GDP ratio increased by 22 percentage points during the pandemic. "If one has a severe adverse scenario in Japan, the jump-up in public debt would be larger than what happened during the year of the pandemic," he said.

[Copyright The Jiji Press, Ltd.]