News Summary: IMF seeks Japanese economic reforms

News Summary: IMF says Japan economy on the mend, but calls for plan to cut debt risks

Associated Press
News Summary: IMF seeks Japanese economic reforms

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FILE - In this Saturday, July 20, 2013 file photo, Japanese Prime Minister Shinzo Abe delivers a speech during his Liberal Democratic Party's campaign rally for parliament's upper house elections in Tokyo. The International Monetary Fund says Japan’s economy is recovering from years of stagnation, but that far-reaching reforms and a “credible plan” are needed to reduce mounting debts and sustain growth in the long run. The IMF’s assessment, in a report issued Monday, Aug. 5, says the near-term outlook of the world’s third-largest economy “has improved considerably” thanks to monetary easing and increased government spending under the administration of Abe. (AP Photo/Koji Sasahara, File)

JAPAN RECOVERING: The International Monetary Fund said Japan's economy, the world's third largest, "has improved considerably" from years of stagnation thanks to monetary easing and increased government spending.

MORE NEEDED: But the report said far-reaching reforms and a "credible plan" are needed for making "significant adjustments" to help reduce Japan's public debt, which will amount to nearly 250 percent of gross domestic product this year.

THE OUTLOOK: The IMF forecasts that Japan's economy will grow 2 percent in 2013 but will expand only 1.2 percent in 2014 as consumers tighten their belts following an expected increase in sales tax. A debate has arisen over whether the government should follow through on its pledge to raise the sales tax from 5 percent to 8 percent by next April.

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