Japan to lead data sharing exercise among creditor countries

For vulnerable middle-income economies, all creditors and donors should work together to restore debt sustainability in a coordinated manner.

In this regard, Japan welcomes the launch of a coordinated debt restructuring process of official bilateral creditors of Sri Lanka , Japanese Finance Minister Shunichi Suzuki told the recently concluded 56th ADB Governors Business sessions.

He said it is essential to improve debt data transparency and accuracy in order to prevent future debt crises. In this context, Japan leads the data sharing exercise among creditor countries. Furthermore, Japan expects ADB to mobilize its expertise and work with the International Monetary Fund (IMF) and the World Bank to enhance debt management capacity and transparency in developing member countries (DMCs).

In addition, it is important to strengthen domestic resource mobilization (DRM) by expanding the tax base and improving tax administration capacity. As many multinational companies have been reactivating their operations in Asia in the recovery phase from COVID-19, it is also essential to steadily implement the international tax framework, including the two-pillar agreement, and actively enhance tax transparency. In this regard, Japan will continue to contribute to the “AsiaPacific Tax Hub” and the “Domestic Resource Mobilization Trust Fund (DRMTF)” through policy dialogue and knowledge sharing on tax issues as well as financial support.

Global economic  predations by the IMF

Meanwhile, Krishna Srinivasan representing the IMF said that the IMF’s latest Regional Economic Outlook describes the resilience of the world’s most dynamic region and important challenges facing its policymakers. Growth in Asia and the Pacific is forecast to accelerate to 4.6% this year from 3.8%cent last year.

The main development has been the reopening of China, where surging consumption is boosting growth across the region despite weaker demand from the rest of the world.

But the region also faces important challenges. In the short term, monetary and fiscal policies will need to remain tight to bring inflation durably back to central bank targets and stabilize public debt. An integrated policy response using all available tools will be needed to manage global shocks. While Asia’s financial systems haven’t seen major impacts following recent banking turmoil in the United States and Europe, they need to be carefully monitored given high leverage among households and corporates.

In the longer term, the Chinese economy that has been the primary engine of regional and global growth for decades is expected to slow considerably in the face of unfavorable demographics and a productivity slowdown. The region should prioritize structural reforms to boost long-term growth, including through innovation and digitalization, while accelerating the green energy transition.