Summary Japan's plan to raise its sales tax was necessary but could threaten its recovery, says S&P.
TOKYO (AP) A leading international economic group says Japan s efforts to end two decades of stagnation are welcome changes that could spark a recovery, but rising national debt threatens its long-term growth and financial stability.
A report by the Organization for Economic Cooperation and Development said Tuesday that the success of Japan s strategy for breaking out of deflation and getting growth back on track remains uncertain.
It said that establishing fiscal health is Japan s "paramount policy challenge." The OECD noted potential risks from a rise in interest rates that could vastly increase the country s burden of servicing its debt. It said curbing that problem could worsen poverty.
Ratings company Standard & Poors said in a separate report that Japan s plan to raise its sales tax was necessary but could threaten its recovery.
