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IMF cuts Japan growth forecast, warns over 'Abenomics'

Published on Apr 8, 2014 9:21 PM

TOKYO (AFP) - The International Monetary Fund on Tuesday cut its 2014 growth forecast for Japan and warned that Prime Minister Shinzo Abe must follow through on promised reforms to cement a turnaround in the world's number-three economy.

In its World Economic Outlook, the IMF said it expected Japan's economy to grow 1.4 per cent this year, down from an earlier 1.7 per cent forecast, before slowing to 1.0 per cent in 2015.

The Washington-based Fund has previously been upbeat on Mr Abe's growth policy blitz - a mixture of big government spending and central bank monetary easing dubbed Abenomics, which is designed to drag the economy out of years of deflation and laggard growth.

The plan's so-called "third arrow" - reforms that include more flexible labour markets and free-trade deals - have been more talk than action so far, although Tokyo on Monday agreed on a long-awaited trade deal with Australia.

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