"The new quantitative and qualitative monetary easing should be implemented to meet the new 2 per cent price stability target, although this may not be enough"
-Organisation for Economic Cooperation and Development (OECD)
Japan needs to implement structural reforms in order to achieve the 2% inflation target set by the BoJ and to revive growth in the world's third largest economy, the Organisation for Economic Cooperation and Development said. The OECD also said that the expanded quantitative easing may not be enough to foster sustainable economic growth. According to the report, the Japanese government should not use multiple tax rates when raising the sales tax. In the meantime, Kuroda's pledge to inject about $1.4 trillion into the struggling economy in less than two years and the significant depreciation of the Yen led the OECD to upgrade its growth forecast. Japanese economy is now expected to expand 1.4% this year and in the next one, compared with a 0.7% and 0.8% growth estimated earlier.
"The new quantitative and qualitative monetary easing should be implemented to meet the new 2 per cent price stability target, although this may not be enough," the OECD said in its economic survey of Japan. "Pushing ahead with structural reform on a broad front is equally imperative to achieve sustained growth."
"The continuing prospect of a downgrade arises from risks associated with recent government initiatives and uncertainty of their success," rating agency Standard & Poor's said in a report.
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