Japan's public debt is very high but is not a serious problem in the short-term as private savings are abundant and investors continue to buy government bonds, a senior International Monetary Fund official told the Nikkei newspaper.

What is important is for the government, upon an economic recovery, to trim debt and improve the country's finances through spending cuts and tax reforms, IMF First Deputy Managing Director John Lipsky said in an interview that ran on Saturday.

Japan's public debt is approaching 200 percent of GDP, the highest among developed nations, keeping bond investors nervous.

Lipsky said that while exports will continue to serve as a key engine for Japan's economic growth, the country should implement reforms to lessen its reliance on exports.

Without reforms, Japan's potential growth rate may fall to around 1 percent from about 1.75 percent in 2007, he said.

The government achieved its self-imposed cap on new debt issuance in a record 92.3 trillion yen ($996.2 billion) budget for the year starting in April, but has yet to come up with medium-term fiscal reform plans.

For a graphic on Japan's fiscal pressures, click: http://r.reuters.com/paw97f

(Reporting by Leika Kihara; Editing by Alex Richardson)

Japan