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Tokyo - A failure of the economic policies promoted by Japanese Prime Minister Shinzo Abe would take a toll on the global economy, the International Monetary Fund said late Thursday.
Abe has advocated aggressive monetary easing steps to reinvigorate the world's third-largest economy and pull it out of the deflation that has lasted more than a decade.
The IMF has supported the policies, and said in a report released in Washington that Abe's economic programme, so-called Abenomics, "would have clear positive net growth spillovers [on the global economy]."
However, the report added that without structural reforms, fiscal consolidation, and the achievement of a new inflation target, output in Japan could decrease by 4% after 10 years.
The IMF simulations suggested that global output losses could reach 2% of GDP if investors in Japan were to reconsider the risk of their investments, leading long-term interest rates to rise 2 percentage points, the report said.
