dpa/GNA – The Bank of Japan on Thursday slightly downgraded its economic growth forecast for the current financial year amid the fallout from the coronavirus pandemic, saying the economy would shrink by 5.6 per cent, compared with the 5.5-per-cent contraction estimated in October.
The central bank expects the economy to bounce back 3.9 per cent in the next financial year starting in April in the post-Covid-19 recovery, revised up from the 3.6-per-cent expansion predicted three months ago.
The bank also decided on Thursday to maintain its ultra-loose monetary policy as the country is battling with the pandemic.
“Japan’s economy is likely to follow an improving trend with the impact of the novel coronavirus waning gradually, but the pace is expected to be only moderate while vigilance against Covid-19 continues,” the bank said in a statement issued after a two-day monetary policy meeting.
Meanwhile, the consumer price index is projected to fall 0.5 per cent in the current financial year, upgraded from the 0.6-per-cent decline forecast in October, the bank said.
It expects the index to rise 0.5 per cent in the next financial year, revised up from the previous estimate of the 0.4-per-cent increase.
The bank began to introduce monetary easing measures in April 2013 to combat deflation and prop up the world’s third-largest economy to achieve the 2-per-cent inflation goal within two years.
However, the rate has never neared the target.