IMF ESTIMATES JAPAN'S NEUTRAL INTEREST RATE AND OUTLOOK
IMF ESTIMATES JAPAN'S NEUTRAL INTEREST RATE AND OUTLOOK
IMF estimates Japan's neutral interest rate to be between 1-2%.
The Bank of Japan is likely to raise interest rates again this year, potentially reaching neutral levels by 2027.
Japan's economy is expected to grow by 1.1% in 2025, driven by wage growth and domestic demand.
Rate hikes should be gradual to support sustained domestic demand.
Risks to Japan's growth are skewed to the downside due to global uncertainty and geopolitical issues.
Rising interest rates will increase the cost of servicing Japan's large public debt by 2030.
IMF supports Japan's flexible exchange rate policy.
