The International Monetary Fund (IMF) has urged policymakers in Japan to consider preparing a contingency plan in case the Ukraine crisis disrupts a fragile recovery following the former’s cut in the country’s economic growth forecast. The IMF said that the Bank of Japan (BOJ) must maintain ultra-easy policy for a prolonged period to sustainably hit its 2% inflation target. It further said that escalation of the Ukraine conflict poses significant downside risks to the Japanese economy, pointing to the potential hit to trade and noting that rising commodity prices could stifle domestic demand. The IMF expects Japan's economy to grow 2.4% this year, lower than a projection for a 3.3% expansion made in January, due to an expected contraction in Q1 and the spillover effects of the Ukraine war.
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