Japan Buffering Oil Price Shock: IMF Official

Washington, April 14 (Jiji Press)–Japan has been cushioning the economic shock of soaring crude oil prices with its ample oil reserves, International Monetary Fund chief economist Pierre-Olivier Gourinchas has said in a recent interview. “Japan is very dependent on oil coming from the Gulf region, but it also has very comfortable oil reserves,” Gourinchas said, adding, “it’s been able to buffer the shock so far.” The senior IMF official said that the reduction in oil production caused by the de facto closure of the Strait of Hormuz by Iran in retaliation against attacks by the United States and Israel and other factors so far stands at about 2 pct of annual global oil consumption, about the same proportion as the dent in oil output during the oil crisis in the 1970s. A key difference between the latest situation and the ’70s is that the current global economy is less dependent on oil and that central banks have better reputations for monetary policy management thanks to the introduction of inflation targets, which “makes it more likely that the shock will be more contained,” he added. In its latest World Economic Outlook report, the IMF kept its projection for Japanese economic growth unchanged from the previous forecast in January at 0.7 pct. Gourinchas said that the country’s economy is expected to be pushed down by the conflict involving Iran, but that this will be offset by the strong performance that carried over into 2026 from the end of last year. However, Japan and “many Asian countries would be more severely affected” if crude oil prices remain high for longer than projected, he said. END [Copyright The Jiji Press, Ltd.]