TOKYO: Private sector advisers of Japan's top economic council urged the government to take into account a wider range of possible changes in the economy in its semi-annual economic projections.
The government should also step up its reviews of past mid- to long-term forecasts, such as when estimates differed from actual economic growth, to raise transparency and accountability, the members said in a proposal presented to the Council on Economic and Fiscal Policy (CEFP).
A government official said current mid- to long-term forecasts are based on the fact that interest rates are being held down by the Bank of Japan's policy.
The advisers suggested it was necessary for the government to carry out a risk simulation if such assumption doesn't hold, the official added.
"The current model assumes the BOJ's long-term bond buying pushes down interest rates," the official told reporters.
"But if you look further ahead, they can't continue buying forever," he cited advisers as saying, adding that they suggested that the government's simulation should address risks associated with it.
The coming economic projections will need to take into account a stimulus package with record spending worth 55.7 trillion yen (US$483 billion) that the government says will boost gross domestic product by around 5.6 per cent.
CEFP, whose 11 members include Prime Minister Fumio Kishida, cabinet ministers, Bank of Japan Governor Haruhiko Kuroda and four private-sector business representatives and academics, is tasked with determining basic principles for the government including the budget and outlining mid-year economic policy.
The proposals by the private-sector members form the basis of the government's long-term economic policy platform.