BOJ to Consider Trimming Economic Growth Forecasts
(Bloomberg) -- The Bank of Japan is likely to consider making slight cuts to its economic projections in its quarterly outlook report next week, according to people familiar with the matter.
Recent data for exports and production have been weaker than previously expected and may result in lowering the estimates for gross domestic product for the fiscal year that ended March 31 and for the current year, according to the people. The last outlook report forecast GDP to expand 0.9 percent in both periods.
While a shift to a more cautious view on the economy needs to be reflected in GDP forecasts, it is less clear whether there will be any reductions in inflation projections, they said. Overall, the central bank sees price momentum as being maintained, according to the people, which suggests there is no need to adjust monetary policy at this point.
Given weakness in recent economic indicators, any small downgrades to growth or inflation estimates shouldn’t be a surprise and would dovetail with the views of economists who follow the BOJ closely.
Governor Haruhiko Kuroda and his board meet April 24-25 to discuss policy and forecasts for the outlook report.
The report will be the first to provide an outlook for the fiscal year starting in April 2021.
The BOJ will not be alarmed about the current state of growth and inflation so long as prices remain on a rising trend, according to the people. They also said it won’t be alarming even if estimates for fiscal 2021 still show inflation short of the 2 percent target.
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