After the Bank of Japan kept its current monetary policy unchanged at its meeting in October, the bank's economic outlook report came to form a clearer picture of its direction in the coming period. The following are the highlights of the Economic Outlook:
- The Japanese economy is likely to continue to recover at a moderate pace.
- Financial conditions are highly adaptive.
- Developed economies continue to grow.
- The economy is expected to continue to expand during FY2019 and 2020.
- The economy continues to grow with the support of external demand.
- The annual rate of change in CPI was positive.
- Inflation developments remain weak compared to the growth of the labor market.
- Inflation took time to get better.
- A state of caution was taken over the families.
- With the output gap still positive, the corporate attitude will gradually shift towards further wage and price hikes.
- The annual CPI change is expected to rise gradually by about 2%.
- It may take longer than expected.
- Economic growth prospects were kept unchanged.
- There are risks on both the upside and the downside.
- Developments in external economies, including protectionist policies adopted, pose risks to economic expectations
- Inflation expectations remained weak compared with economic growth and wage rates
- The growth rate forecast lower compared to July was reduced from 1.5% to 1.4% in 2018.
- GDP growth forecasts for 2019 and 2020 were maintained at 0.8%.
- Consumer price growth forecasts for the year 2018 were lowered from 1.1% to 0.9%.
