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BoJ cuts growth forecast and predicts inflation stagnation

Tokyo, Oct 28 (EFE) .- The Bank of Japan (BoJ) revised down its forecast for the country’s economic growth on Thursday, which it expects to expand by 3.4% in fiscal year 2021, and abandoned its previous estimate of inflation increase for this year.

The Japanese central bank lowered its previous forecast of growth of the country’s gross domestic product (GDP) by four tenths, alluding to the persistent pressure of the covid-19 pandemic on exports, production and consumption, it detailed today in its report. quarterly economic forecasts.

The BoJ foresees that exports and production “will slow down temporarily” due to problems in supply chains, which are impacting mainly among vehicle and electronics manufacturers in the Asian country.

Consumption, one of the key pillars of the Japanese economy, “is contained for the moment, mainly due to surveillance against covid-19,” said the entity, which lowered its forecast of price increases for the year 2021 to zero. (which will end on March 31, 2022), from the 0.6% year-on-year increase estimated in its previous July report.

Despite this, the Japanese central bank expects consumption to reactivate from now on, along with the recovery of the service sector, and the advance in vaccination. More than 70% of the Japanese population already has the two-dose regimen and the country plans to start administering a third soon.

“The evolution of covid-19 and its impact on the national and overseas economies continue to be the subject of attention. In particular, there is great uncertainty as to whether the resumption of economic activity can progress smoothly while protecting public health.” , stated the BoJ among the current risks it contemplates.

For the year 2022, the Japanese bank expects a GDP growth of 2.9%, an improvement of two tenths compared to its previous report, and that prices will increase by 0.9%.

The entity maintained its forecasts for 2023, when it predicts an economic expansion of 1.3% and 1% in inflation.

The BoJ published the report at the end of its monthly two-day meeting, in which it kept its monetary policy unchanged, based on negative short-term interest rates (-0.1%) and an extensive program of purchase of government bonds and exchange-traded funds to keep 10-year bond yields around 0%.

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