'Abenomics' is the only way, says Japan's Prime Minister Shinzo Abe

TOKYO (AFP) - Japanese Prime Minister Shinzo Abe said on Thursday his economic policies were "the only way" to rein in Japan's huge public debts and spur growth in the world's third-biggest economy.

"I think this is the only way," Mr Abe said in an exclusive interview with Agence France-Presse after the International Monetary Fund welcomed his plans but warned of "considerable downside risks" over Tokyo's ballooning national debt.

Since coming to power in December last year, Mr Abe has launched an array of pro-business big-spending measures, mixed with aggressive monetary policy by the Bank of Japan, in a package touted as "Abenomics".

The measures are designed to end the 15 years of deflation that has smothered sustained growth in Japan, where national debt stands at more than twice the size of its economy. It also borrows to fund normal expenditure.

"Japan has a problem of accumulated debt. Unless we end deflation, in any case, this accumulated debt problem will not be solved," Mr Abe told Agence France-Presse.

"I think this is the only way. Now, the Japanese economy is generally recovering smoothly," he said.

Mr Abe was speaking shortly before French President Francois Hollande touched down in Tokyo for a three-day visit expected to feature talks on business ties that both sides hope will spur their economies.