Transcript

Transcript of Press Briefing on Japan Article IV

February 9, 2024

PARTICIPANTS:

Moderator:

HUONG LAN “PINKY” VU

Communications Officer

IMF

Speakers:

GITA GOPINATH

First Deputy Managing Director, IMF

RANIL SALGADO

Assistant Director and Mission Chief for Japan, Asia and Pacific Department, IMF

HEEDON KANG

Deputy Division Chief, Monetary and Capital Markets Department, IMF

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MS. VU: Good afternoon, everyone. Thank you very much for joining the IMF's press conference on the conclusion of the 2024 Japan Article Four Consultation Mission. I'm Huong Lan Pinky Vu from the Communications Department at the IMF, and today I'm delighted to be joined by three speakers, also from the IMF, next to me is Ms. Gita Gopinath, First Deputy Managing Director, and next to Gita, Ranil Salgado, Assistant Director and Mission Chief for Japan and in the Asia and Pacific Department, and the gentleman on my far left, Heedon Kang, Deputy Division Chief in the Monetary and Capital Markets Department.

As we speak, the concluding statement has been published on our website@imf.org, and an embargoed copy of the concluding statement has been provided to you in advance, and I hope that you have had a chance to look at it. So, to start, I will invite Gita to deliver some opening remarks, and then we'll take questions from you. Gita, the floor is yours.

MS. GOPINATH: Thank you, Pinky, and hello everyone. Thank you so much for joining us as we conclude the 2024 Article Four Mission for Japan. Before we get into our findings, I want to recognize that 2024 began with a terrible tragedy here in Japan. On behalf of the IMF, our deepest sympathies are with those who are affected by the earthquake in the Noto Peninsula on January 1st. We hope for healing and strength as you rebuild from this disaster. I also want to thank the authorities, the Bank of Japan, and our partners in the private sector for their collaboration in this process. We appreciate your engagement with our team over the past few weeks here in Tokyo as we assess Japan's economy.

To sum up our findings and recommendations, I will cover five topics. The first is on the economic outlook for Japan. For decades, Japan has struggled to boost low inflation and weak domestic demand. Economists have strained to explain this phenomenon, and Japan has been a pioneer in developing new policy tools that have since been implemented around the world. We now think this period is coming to an end. The output gap closed in mid-2023, meaning that demand is now aligned with the economy's capacity. We project 1% growth in 2024. This is up slightly from our most recent World Economic Outlook update. Thanks to stronger government spending. And achieving sustained 2%, inflation looks increasingly likely. Why? Because for the first time in three decades, price increases are now broad-based across goods and services. Wages are growing at their fastest pace since 1995, amid a tight labor market. And demand side factors are playing an important role in driving inflation. Most households and firms now expect inflation to remain above 2% going forward. Looking ahead, the impact of import prices on inflation will fade, but we expect a very strong labor market to drive faster nominal wages, which will keep core inflation above the 2% target until the second half of 2025. This outlook shapes our policy advice for Japan.

So, this brings me to my second topic, which is on monetary policy. Our view is that the Bank of Japan has been appropriately cautious by keeping policy extremely accommodative given Japan's history of deflation and mixed signals from recent data. Unconventional monetary policies have done their job of supporting the recovery and raising inflation expectations but are no longer needed to achieve the inflation target. That means the Bank of Japan should exit from yield curve control and end the quantitative and qualitative easing framework while continuing to roll over its maturing JGBs to avoid abrupt shifts in bond markets. The BOJ should then gradually raise the policy interest rate over the next few years. These policy shifts should be gradual and well communicated.

The third topic is fiscal policy. With a closed output gap and high public debt to GDP, fiscal policy should be meaningfully tighter. In the longer term, the public debt to GDP ratio will increase steadily to accommodate age related spending pressures. Fiscal consolidation is needed to rebuild fiscal buffers and ensure debt sustainability underpinned by both revenue and expenditure measures. On the revenue side, there are several options, including, for example, strengthening financial income taxation for high income earners. On the expenditure side, this can be achieved by limiting untargeted transfers or by phasing out energy subsidies. Going forward, additional expenditure policies should be offset by higher sustainable revenues to pay for them.

Fourth is the financial sector. We also conducted an in-depth assessment of the financial sector's resilience as part of our Financial Sector Assessment Program. The stress test exercises suggest that the financial system is broadly resilient to a range of macro financial shocks, including a potential rise in foreign and domestic interest rates and a sharp drop in global and domestic growth. But there are vulnerabilities, including from sizable securities holdings, foreign currency exposures, and signs of overheating in parts of the real estate markets. These require close monitoring and underscore the need to further strengthen the financial oversight and crisis preparedness frameworks.

Finally, structural reforms can help make the Japanese economy more dynamic, more green, and more inclusive. This includes measures to empower women in the labor market, such as increasing spending on childcare facilities and reforms to make working conditions more flexible. As Japan prepares its economy for the future, including to face shared global challenges, we remain grateful for its continued leadership in fostering multilateral collaboration and its partnership with the IMF. Thank you.

MS. VU: Thank you, Gita. We will now open the floor for your questions. But before we begin, let me outline some ground rules. So, this press conference focuses on Japan's economy. So, if you have inquiries about the global economy or any other countries, please reach out to me directly after this event and I will be happy to assist you.

And for those in the room, if you want to ask a question, please raise your hand, and wait for me to call on you. One of my colleagues will pass you a microphone. Please introduce yourself, your news organization. And for those joining online, you can also raise your virtual hand and wait for me to call on you. You are encouraged to turn on your microphone and your camera to speak, but if you feel more comfortable, you can also type your questions in the chat, and I will read them out loud for you.

And please be noted that we have simultaneous interpretation so we can ask the question either in English or Japanese. So, with that, the floor is yours. I start with some questions in the room and then we move to online participants. The gentleman here.

QUESTIONER: Hello. Good afternoon. My name is Mikio Sugeno from Nikkei. Thanks for presentation. I have a question to the world ranking of the nominal GDP for Japan is highly expected to be down to fourth from the third in last year by being overtaken by Germany. So, can you please comment on the implication, reason, or the future prospect of the fact? And secondly, regardless the ranking of the aggregate GDP, Japan's per capita GDP is ranked maybe on the 30 ^th, so it's very low. What is the most essential measures for Japan to improve this situation? Thank you.

MS. GOPINATH: If you look at Japan's nominal GDP in dollars, then it is the case that last year it slipped below the level of Germany. And an important reason for that is the yen depreciation of about 9% last year. So, that is an important driver. So, in general, when you look at market-based exchange rates and use that to determine nominal GDP levels and compare across countries because of the volatility of the currency, you can see these numbers moving around. Now at the IMF, when we put out our world growth numbers, instead of using the market-based exchange rates, which tends to be volatile, we use what's called a purchasing power parity-based exchange rate. And based on that, Japan still remains higher than Germany in terms of its GDP.

To your question about growth prospects in in Japan, what is true is that our medium-term projection for growth in Japan is 0.4%. So, that is the main challenge for Japan, which is how to raise that growth outlook into the medium term and in the long term. For that, it's important to undertake structural reforms. One is increasing flexibility of the labor market. On the positive side, we've seen female labor force participation increase, but most of that participation has taken place in the form of non-regular employment as opposed to regular employment. And career opportunities for women are quite limited. And you can see that when you look at women in the leadership positions, they're very few. So, it is important to be able to create the environment for women to participate more substantially in the labor market. That requires several reforms, including in allowing for more flexible work models in the workplace. Teleworking is helpful. It's also important to provide expanded childcare facilities for women, especially for children -- those who have children under the age of two. And that's going to help not just with bringing women into the workforce, but also in terms of raising fertility.

That's what we see in terms of international experience, but more generally increasing dynamism in the labor market, moving away from lifetime employment so people can come in and out of jobs, that's going to enhance dynamism. That's also going to help new startups, innovation, and creating that kind of dynamic environment. And of course, Japan is investing in the green transition and the digital transition. All of these are important to raise medium term growth.

MS. VU: Thank you, Gita. I will take one more question from the room before we move to online. The gentleman over there, please.

QUESTIONER: Hi, my name is Yoshi Makinohara. I'm a reporter for Bloomberg News, based here in Tokyo. Thank you for your presentation today. My question is that when you talk about the likelihood of hitting 2% inflation is increasingly likely. That's an encouraging sign for the economy. And I was wondering if you could give me your view on how soon the Bank of Japan should end the negative rate program. And also, after that, when you talk about the Bank should raise interest rates over the next few years, what's your view on the terminal rate? How high should the short-term policy rate should be? Thank you.

MS. GOPINATH: So, after several decades when demand was too low and inflation too low, we do see a turnaround. We do expect to see inflation above the Bank of Japan's target both this year and into next year. We are seeing wage growth at levels that we haven't seen in a very long time. It's still below inflation, but it's moving in the right direction. Our expectation is that this next round of wage negotiations in Spring will deliver a higher wage growth than was the case last year. And if you look at expectations by households and firms, they are in line with the 2% goal. So, given these confluence of factors, our view is that there are grounds to exit YCC and QQE. At the same time, we are still in an environment where there are risks to whether this process of inflation will remain durably at the 2% target. There are downside risks to inflation, and the data is mixed. So, I think it is absolutely important that the Bank of Japan is doing what it is doing, which is to move cautiously and to maintain very accommodative monetary policies, which they can do through their short policy rate instrument. That alone can help them deliver very accommodative monetary policy.

So, the idea would be to move gradually and wait for the incoming data to gain greater confidence that this process is going to deliver durable target levels of inflation. In terms of the timing, I think it is going to be important what the March data reveals for wage growth. That is an important indicator. If that comes in, in line with our current expectations, then of course there could be a reason to move rates. But what I want to emphasize is that this process needs to be gradual because the uncertainty is not resolved. So, it has to be gradual, policies will have to stay very accommodative. In terms of what the terminal rate will be, I think there is still quite a bit of uncertainty around that, so, I wouldn't put a terminal rate at this point. This has to be a data driven process, and it has to be a gradual process.

MS. VU: Thank you, Gita. Now I turn to online participants. I see Max Sato with Mace News has a question. Max, please go ahead.

QUESTIONER: Hi, Max Sato here with Mace News. I'm going to ask you something about the BOJ. In the statement, you didn't really clearly say when the BOJ should end the current policy framework. You just said should consider exiting now. So, judging from what you've just said, is it fair to expect that the Bank of Japan is going to exit the policy framework in April at the earliest? And when they do, do you think they should raise the negative interest rate on the short end of the curve?

MS. GOPINATH: So, in terms of the monetary policy framework, there has already been important adjustments that have been made over, for instance, the second half of last year, in line with the recommendations that we gave in our last Article Four. Much greater flexibility has been introduced in YCC in terms of the tenure rate, with 1% number, with pointing to it as a reference as opposed to a ceiling. So, there has already been greater flexibility in YCC and also changes in QQE. So, I think the direction is right. That is the right direction in which we are consistent with our baseline expectations of what is going on with underlying inflation dynamics.

Again, in terms of the details about when exactly do you move to raising the short-term rate, our expectation is that the dynamics are in the right direction. If the data goes in the right direction, then of course, this year would be the time to start. But again, I think we should wait for what the wage data delivers in March and then determine what the right path forward is.

MS. VU: Thank you, Gita. I can see Kana Inagaki from the FT has your hands up. Please, go ahead.

QUESTIONER: Great, thank you. My name is Kana Inagaki from the Financial Times. Thank you for taking my question. Sorry, I'd like to ask a little bit more about the BOJ as well. I know you were saying that you wouldn't put a rate on it as well, and that it's going to be a gradual process. Considering the uncertainty that you mentioned, which the BOJ also shares, it does seem like there is a possibility that the BOJ, even after it lifts negative interest rate policy, it would keep short term rates at around zero or 0.1% for some time. If they stayed at this level for quite a long time, would that be a concern for you, or is that quite within your expectations?

And the second question, you were saying about how important looking at the March data on wages would be. But I was wondering, when you talk about how you see positive signals from wages, obviously there's been some good signals for the big firms. What about, for example, for casual workers? It seems like data is quite difficult to assess for the service sectors, et cetera. So, what do you use to analyze that service inflation is also picking up in Japan.

MS. GOPINATH: Thank you. I'll answer your first question, and I'll ask Ranil to come in on the second question. On the first question, we agree with the Bank of Japan that there remains considerable uncertainty in terms of the inflation path and ensuring that inflation is now durably going to be at 2%. And given the history of deflationary pressures, I think it is right to be cautious. So, the strategy of moving gradually and moving away from relying on unconventional monetary policy tools but relying more on the short-term rate, hits that sweet spot, which is you're able to keep monetary policy highly accommodated. Given that at those levels, even if you increase by ten basis points, we're looking at very negative real interest rates. So, that provides the accommodation that is needed, given the uncertainty. And then, of course, what you do after that is going to depend on incoming data. That would be the right approach to take and not to prejudge for now and pre-commit fully to a particular path. I think it's important to be driven by the incoming data, especially given the uncertainty. Ranil?

MR. SALGADO: Thank you. So, in terms of how we look at the data, I think that was mostly your question related to wages and prices. So, first on wages, I think part of it is the experience of last year's Shunto round, where you had the first significant increase in some time in recent Japanese history. And of course, you see the first round from the large firms, from the Shunto. And as the months go on, you get the smaller firms. And then separately, you have to also see what's happening with firms outside the Shunto round, which larger percentage of firms say the SMEs are outside that entire framework. But I think the general observation from last year was that while large firms gave more, for whatever reason, small firms also gave significant wage increases, a little bit less, but in line with a little bit of a spread with the larger firms. And I think that reflects the fact that the job market in Japan is very tight right now. We hear of many firms who are struggling to find labor across many sectors. Some of the good rules on work style reforms, for example, will limit overtimes going forward, and that can put even additional pressure on labor markets in Japan. So, that's more or less on the wages. We're looking for a good first number and then subsequent follow up through June, July.

In terms of the Shunto, the wage data is very noisy. I think most economists try to do it on a same sample basis. Currently, actually, part time workers are getting even higher wage increases than the regular longer-term full-time workers. But that reflects how tight the labor market is at the moment.

In terms of prices, we try to look at a dispersion of prices. So, right now, you're getting some disinflationary pressures from import prices, whether it be commodities or also goods. Because global goods prices are coming down. What we're seeing is price increases spreading to services. One of the difficulty in Japan is rents. So, we look mainly at services x rents. Rents, for whatever reason, are very stable in Japan. There's a technical factor, but it could also be the structure of the housing market. And so, one measure we like to look at is service inflation, excluding rents, and then the breadth of the price increases. I'll stop there.

MS. VU: Great. Thank you, Ranil. Yeah, I'll take one more question online, then we'll go back to the room. I got a question here from Anthony Rowley, South China Morning Post. Does the real economic outlook for Japan justify a surge in stock prices, especially given China slowdown?

MS. GOPINATH: So, we had a strong growth number last year for Japan of 1.9% and now we expect it to slow down to 1% because last year there were one-off factors including a surge in tourism that reflected the weaker yen. But there are good reasons to see the surge in the stock market and I'll mention some and I'll ask Heedon to come in and expand on it. What we have is we are seeing corporate profits at high levels. So, that was consistent with strong stock market. The weaker yen of course also then enhances the income of companies that earn from exports. That's another factor that's playing an important role. So, there are good reasons for which you can explain why you have strength in the stock market. Let me bring in Heedon.

MR. KANG: Yeah, well, Japanese stock prices like on an aggregate basis have reached as you know, like multidecades high with Nikkei 225 increasing by nearly 40% since January 2023. As Gita mentioned, there are several factors behind, just to name a few. As Gita mentioned, there is a strong corporate earnings, a weak yen and also broad based inflation. The weak yen actually makes the yen denominated assets more attractive to the foreign investors and also pushes up the price of export related stocks. And the broad-based inflation gives a hope that Japan is finally moving away from a decades long deflation. But another important driver is Japan exchange Group's corporate governance reform. And it requires listed companies to meet certain improved corporate governance and also the business' performance criteria. So, structuring reform is also another important driver for the recent stock market performance. I will stop here.

MS. VU: Thank you Heedon. We'll go back to the room. Do we have any questions from this side? So, if we don't have any questions in the room, let me go back to online participant. I think Max Sato from Mace New has a follow up question. Max.

QUESTIONER: Okay, so judging from the summary of opinions released by the Bank of Japan. At least one member said there's a risk of falling behind the curve if they don't raise rates earlier than later. So, do you also agree that they have only kind of a narrow window of opportunity when it comes to switching policy and raising rates?

MS. GOPINATH: I believe that their strategy of moving gradually and maintaining high levels of accommodation remains appropriate at this time. So, they can, of course, maintain very accommodative policies. Even if they were to raise rates by 10 basis points, it would be still very accommodative. So, the exact timing of that is for them to determine. But as of now, I don't believe we see that there is a very high risk of being behind the curve. I think it is important to see what the data delivers again through the wage negotiations and so on. Global events, of course, also have implications for what the implications for inflation in Japan, including what happens, for instance, if some of the conflicts lead to commodity prices going up and their implication for import prices. So, many things can shift. But again, based on current data, I think the approach of moving gradually, remaining accommodative, and relying on the short-term policy rate to provide the monetary guidance is a useful way to go.

MS. VU: Anthony Rowley from the South China Morning Post also have a follow up question. What further impact will China's slowdown have on Japan?

MR. SALGADO: Japan has a broad spectrum of trading partners, of course. So, for us, the key premise is as long as the global economy remains relatively resilient, and that is what we're expecting, that the Japan economy should not be too adversely affected. Now, of course, China is an important trading partner and to the extent there are downside risks from China that could impact Japan's trade with China. In addition, where I think there's the potential for a further rebound is in tourism from China, even though tourism for Japan as a whole, I'm talking about inbound tourism, has been very strong, with the numbers reaching levels comparable to before COVID and spending being much higher, an area the set of tourists that have not rebounded yet are from China. And in some sense, that's an upside risk for the Japanese economy if Chinese tourists, especially group tours, return to Japan.

MS. VU: Thank you, Ranil. Now I will go back to the room and check one more time if we have any more questions in the room. Okay, the gentleman here. And then we go to this lady.

QUESTIONER: Thank you. Thank you for taking a question for second time. I'd like to ask a question about Japan's fiscal policy. And I was really impressed by the fact that you were commenting on the recent stimulus package. It's a very critical one. And then I'd like to ask you about potential risk of the trust in JGB. Maybe can you comment the downgrade risk of the JGB or something? Thank you.

MS. GOPINATH: Given the current environment where demand we estimate is sufficiently high to meet potential supply, so we do not have a negative output gap. Output is at potential, given that, that's the case, given that Japan's debt to GDP is already very high at around 250% of GDP and with interest rates projected to increase, it is important to have a meaningfully tighter fiscal policy in Japan than what is currently the case.

I don't see the risk as being one of loss of trust in JGBs because it remains the case that the rate at which the government borrows is extremely low and there's a very large domestic demand for those bonds. So, that is not the immediate risk. I think what is important to keep in mind is that there is firstly, no need for a stimulus in an environment where the output gap is closed. And secondly, there are a lot more spending needs that are going to come in the future. So, based on current policies, in the longer-term Japan's debt to GDP will continue to rise.

In addition, there are increased demands for spending coming from defense spending needs, from the green transition, from the digital transition. So, all of these are additional sources of spending pressures that can arise. So, we believe that now is the time to consolidate and to build fiscal buffers so that if there is any additional spending that's being incurred to make sure that the revenues keep up with it, now the revenues can keep up with it if you are, for instance, investing in structural reforms that then generate higher growth and that can help you. But in many cases, that's not where the revenues come from. So, you might actually have to raise higher taxes. So, it's important to make sure that the stream of spending and the stream of revenues match going forward.

MS. VU: Thank you. I think I saw a hand here?

QUESTIONER: Yes, thank you so much for your time today. This is Kama from Bloomberg News. I wanted to ask about the resilience in banking sector in Japan. I think the report touched on the effects of potential heating in the property market. I wanted to ask how do you assess and what is the outlook for the banking sector given that the recent U.S. commercial property market (inaudible).

MS. GOPINATH: Because we just did a Financial Sector Assessment Program along with the Article Four, we ran a stress test of what would happen if interest rates went up by a lot and growth fell by a lot. So, it's a really stressful environment. Our overall conclusion is that the Banking system as a whole is resilient. It has strong capital buffers and liquidity buffers as a whole. But that said, of course there are pockets of vulnerabilities, which is why it is important to remain very vigilant and pay attention, including through what might happen in the property sector.

To your question about possible spillovers from developments in, for instance, the U.S. commercial real estate market, we see those spillovers as quite limited, given the exposure of Japanese banks. So, that direct channel is limited at this point. But that said, if there is a much more bigger financial turmoil in the U.S., and that leads to a tightening of financial conditions in the U.S., then of course that has spillovers to all countries in the world, including to Japan. So, it's the more the indirect channel. If this were to become much more widespread, that those spillovers could be substantial.

MS. VU: Do we have more questions in the room?

QUESTIONER: Akihisa Takimoto from Reuters. I have one question about the assumption of your economic outlook of Japan. I think in forecasting the Japanese economy, I think you need to forecast the global economy as well. Could you tell me a little bit about your assumption about what will happen to the two global geopolitical events? I mean, I'm talking about Gaza and Ukraine. Do you think the ceasefire may happen in this year or not? And if the ceasefire will happen, what will that affect to global economy, especially in the commodity market, energy market, and to Japan as well?

MS. GOPINATH: So, we very recently put out our update for the global economic outlook, and we have growth projected to be around 3% this year, 3.1% this year, and around that number next year too. What we highlighted was the greater resilience of the global economy as a whole, and particularly strength in the U.S. economy, were some of the drivers for this outlook. Now, as you mentioned, the risks to the outlook, which we think are more balanced than it has been in the past, but still there remain risks. And some of those risks include what happens with these different conflicts, including the conflict in the Middle East. I mean, our assessment is that as long as this conflict remains contained regionally, in a regional way, then spillovers to the rest of the world as a whole are not that large. As we saw commodity prices, for instance, oil prices are back below what they were at the start of the conflict. So, as long as it remains contained. But otherwise, I have no clue about what will happen on the political side of things or when peace might come. I mean, our constant wish is that there is peace in all parts of the world, but that is above my pay grade.

MS. VU: Thank you, Gita. I think we'll go back to the virtual space to take a few more questions. Leika Kihara from Reuters wants a question.

QUESTIONER: Thank you. I just have one question about the labor shortage Japan faces. It's great that we no longer face the problem of low demand, but on the other hand, what we're seeing is a labor shortage that is intensifying and could even curb growth. For example, when you go to the outskirts of Japan, some of the hotels cannot hire enough staff, so would have to reduce the number of rooms available. This suggests that Japan now faces a supply constraint. How big is this risk longer term? And what are the possible solutions that the IMF can propose? Thank you.

MR. SALGADO: Thanks, Leika, for the question. So, yes, we are seeing substantial labor shortages in Japan. Japan has done a very good job boosting labor force participation. There's probably some scope to boost it more, but it can't rely on the ability to further boost female or elderly labor force. I mean, some more could be done there, but it can't rely fully on that.

So, one, as Gita has mentioned earlier, is the need for structural reforms to enhance the productivity of workers. So, you get more from workers. So, importantly, she's already mentioned the labor market, structural reforms, which we think are key to not only supporting productivity growth, say, through better ideas in innovation, better reallocation of workers across sectors, from maybe weaker sectors to stronger sectors, which would also support productivity growth. So, I think that's the most immediate key. It's also the key, the long-term key and the challenge that Gita already mentioned.

In addition, Japan has been gradually increasing foreign workers. So, to the extent that can be considered, it's partly a political decision. We believe Japan should think about that as well. I'll stop there.

MS. VU: I think we have time for one more question, and I'll take one question related to the Leika's question, this question from Anthony Rowley. When do you think Japan's declining population trends will begin to bite?

MR. SALGADO: So, in some sense, the declining population trend has already bitten Japan, which is unfortunate, but Japan has done a good job. Even though the population of Japan has been declining, what strikes us is the overall labor force in Japan so far has not declined. That again, goes back to the comment I made earlier that one of the great achievements over the last decade for Japan is increasing labor force participation.

Gita mentioned earlier, though, that some of the workers who are part of this increase have been in, especially women, have not been in non-regular jobs. The gender gaps remain wide, so we need more effort to narrow those gender gaps to make those workers more productive and to achieve their full potential. She mentioned this earlier, there are very few female leaders in Japan. It's very striking. So, we need to create an environment for women to remain in the labor force throughout their career, or when they go out of the labor force, they feel comfortable coming back into the labor force. By the way, that's true of men, too. So, making that a positive development will be very good. The ability to shift out of the labor force, for example, to go to a startup - an individual entrepreneur - that's also a great benefit, will support growth in Japan. So, longer-term, we think, as we've been discussing, enhancing the labor market and its flexibility is key.

MS. VU: Thank you very much, Gita, Ranil, and Heedon. We have reached the end of our press conference today. Please be noted that the video recording and transcript of this press conference will be posted on imf.org afterwards. Thank you very much for joining us today, and we look forward to seeing you at our future events. Have a great day.

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