LEAD: BOJ's Kamezaki sees speedy fiscal reform as vital to ending deflation
Wednesday, July 28, 2021 10:19 AM

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SAPPORO, Jul. 28, 2010 (Kyodo News International) --
(Editors: CHANGING DATELINE, ADDING THREE GRAFS FROM BOTTOM)

Bank of Japan policy board member Hidetoshi Kamezaki said Wednesday that implementing the government's growth strategy and fiscal reform plans ''with a sense of speed'' will be key to ending deflation in the Japanese economy.

''Demand should be expanded...for the Japanese economy to move away from deflation,'' Kamezaki said in a speech in Sapporo. ''On how to realize this, I place my expectations on the government's New Growth Strategy and the Fiscal Management Strategy announced last month,'' he said, according to a statement released by the central bank.

''The most important thing is that these strategies are put in practice with a sense of speed as shown in the timetable, without fail,'' he added.

The new growth strategy through 2020 features plans to create a total of 123 trillion yen in demand and 5 million jobs in such areas as trade, health care and clean energy. The fiscal reform plan, meanwhile, seeks to achieve a primary surplus in state and local finances in fiscal 2020.

On the outlook for the Japanese economy, Kamezaki said two factors that have largely helped the country toward recovery would ''weaken,'' referring to overseas economies and government incentives through December for purchases of energy-efficient consumer appliances and cars.

But he also said the current child-care allowances program, one of the election campaign promises of the ruling Democratic Party of Japan, may spur individual consumption to some degree, while maintaining that the economy is likely to be on a mild recovery trend.

At a press conference held later in the day, Kamezaki said that Europe's stress tests to gauge the capital health of the European banking system were ''not necessarily lenient'' as some have criticized.

''Detailed information on the banks' asset situations was revealed, and transparency sharpened,'' he said.

The Committee of European Banking Supervisors last Friday released the results of the tests, announcing that seven of 91 banks in European Union member nations failed to make the grade.

 

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