THE International Monetary Fund yesterday cut its 2019 economic growth forecast for Japan for a third time this year amid heightened risks from the global slowdown and called on the government not to tighten its spending stance for now.

The fund also made several recommendations for the Bank of Japan, including the targeting of shorter-term bonds, while reiterating its call for more ambitious structural reforms to boost growth.

“Fiscal policy should be supportive to protect near-term growth and promote inflation momentum,” said IMF Managing Director Kristalina Georgieva, according to the IMF’s Article IV consultation on the Japanese economy. “Beyond the short-run, a clear commitment to long-term fiscal sustainability is essential.”

The IMF reduced its 2019 growth forecast for the world’s third-largest economy to 0.8 percent down from 0.9 percent. The fund said Japan’s expansion would further decelerate to 0.5 percent next year, matching the country’s potential growth rate.

Japan’s economy has been resilient despite weakness in eternal demand, but that “will be tested — most immediately by a synchronized global slowdown, and over the medium-term by uncertainties in the world economy, and by its own demographic trends,” Georgieva said.

While seven years of Abe- nomics produced visible progress such as lowering deflation risk and cutting fiscal deficit, inflation remains below the Bank of Japan’s 2 percent target and public debt is not yet on a sustainable path, according to Georgieva. (SD-Agencies)