Bank of Japan cuts inflation, economic growth forecasts

Japanese inflation currently stands below one percent, less than halfway to target, despite six years of aggressive monetary stimulus. (AFP)
Updated 25 April 2019

Bank of Japan cuts inflation, economic growth forecasts

  • The Bank of Japan revised down its inflation forecast for the year to March 2021 to 1.3 percent from 1.4 percent
  • Japanese inflation currently stands below one percent, less than halfway to target

TOKYO: Japan will fail to reach its two-percent inflation target even by 2022, the central bank predicted on Thursday as it also revised down its estimate for growth in the world’s third-largest economy.
In its closely watched quarterly report, the Bank of Japan forecast inflation of 1.6 percent in the fiscal year ending March 2022, meaning its years-long battle to reignite prices is far from won.
The BoJ revised down its inflation forecast for the year to March 2021 to 1.3 percent from 1.4 percent.
Japanese inflation currently stands below one percent, less than halfway to target, despite six years of aggressive monetary stimulus under BoJ Governor Haruhiko Kuroda.
The central bank kept its ultra-loose monetary policy in place after a two-day policy board meeting but added a fresh timeframe, saying the “extremely low” rates would be maintained “at least through around spring 2020.”
It cited global economic uncertainties and the risks of a scheduled hike in consumption tax later this year from eight percent to 10 percent.
Economic growth would also come in at 0.8 percent this fiscal year, climbing to 0.9 percent the year after — both downward revisions of 0.1 percentage points.
It forecast GDP at 1.2 percent in the fiscal year ending in 2022.
Kuroda has come under fire over the effectiveness of his monetary easing program and how he intends to return the bank’s policy to normal.
In 2013, the BoJ embarked on a huge bond-buying program in a bid to stimulate long-dormant prices with the stated aim of hitting the two percent mark within two years.
But while the plan — which ran in tandem with Prime Minister Shinzo Abe’s big-spending drive to ramp up the economy — showed early promise, the bank has been forced to delay several times the date for hitting its target.
In January, Kuroda was forced to revise down the BoJ’s inflation forecasts, a step seen as further evidence that authorities are unable to boost prices.
Other central banks have been gradually taking more guarded views on the global economy, with minutes of the US Federal Reserve’s policy meeting last month showing board members split between optimism and caution.
Kuroda is due to speak later Thursday.


Saudi economy can withstand pandemic: Finance minister

Updated 25 May 2020

Saudi economy can withstand pandemic: Finance minister

  • Mohammed Al-Jadaan thanks Saudi leadership for urgent decisions taken to deal with the coronavirus crisis

JEDDAH: The Saudi economy can withstand the coronavirus crisis despite the need to cut spending, Finance Minister Mohammed Al-Jadaan said on Saturday. 

“The Saudi economy is able to absorb the decline in revenues and to deal with the budget deficit,” he said, adding that the government “firmly addressed this crisis with all determination, while prioritizing the safety and health of its citizens and residents.”

Al-Jadaan said the government “also worked hard to provide people with their basic needs, secure the necessary resources for health care systems, financially and economically support those most affected by the pandemic, and re-prioritize spending under the current circumstances.”

He thanked the Saudi leadership for “its unlimited support, and for the urgent decisions taken by the government to deal with the coronavirus crisis, including the initiatives it had launched to protect the Kingdom’s economy and support the private sector, its enterprises, low-income individuals and investors.”

The Kingdom “also showed a great sense of responsibility and commitment by holding the extraordinary G20 Summit in the framework of its presidency of the group, and recommending an injection of $7 trillion into the global economy as part of the financial policies, economic measures and security schemes aimed at facing the social, economic and financial repercussions of the pandemic,” he said.

“Saudi Arabia called for the bridging of the funding gap, estimated at $8 billion, to discover and develop new diagnostic tools, treatments and vaccines, while also providing $500 million of the required amount.”

Al-Jadaan congratulated the Saudi leadership on the occasion of Eid, and asked God to bless the Kingdom, protect it from the pandemic, and maintain its security and stability.