February 5, 2020
Bank of Japan
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Ehime
WAKATABE Masazumi
Deputy Governor of the Bank of Japan
Introduction
Good morning. It is my pleasure to have the opportunity today to exchange views with
administrative, financial, and business leaders in Ehime Prefecture. I would like to take this
chance to express my sincere gratitude for your cooperation with the activities of the Bank of
Japan's Matsuyama Branch.
At the Monetary Policy Meeting held in January, the Bank updated its projections for Japan's
Outlook
economic activity and prices through fiscal 2021 and released them in its quarterly
for Economic Activity and Prices
(Outlook Report). Today, while outlining the Outlook
Report, I would like to explain the Bank's view on developments in economic activity and
prices, including the global economy, as well as monetary policy conduct, with a focus on
economic growth.
I. Financial and Economic Developments
A. Developments in the Global Economy
Let me start by talking about developments in the global economy. The growth rate of the
global economy has decelerated since around mid-2018, and according to the latest forecasts
released by the International Monetary Fund (IMF), the global growth rate for 2019 likely
was slightly below 3 percent for the first time in 10 years (Chart 1).
The recent slowdown in the global economy was triggered by a rapid deceleration in
manufacturers' activities on a global basis, mainly due to a heightening of uncertainties over
the U.S.-China trade friction and adjustments in the cycle for IT-related goods that were
affected by weak demand, such as for smartphones (Chart 2). A heightening of uncertainties
also has led to the postponement of business fixed investment, with the world trade volume,
mainly in IT-related goods and capital goods, decelerating significantly. However, while
relatively large adjustments have been seen in the manufacturing sector, the
nonmanufacturing sector has been steady on a global basis. This contrast between the
manufacturing and nonmanufacturing sectors sometimes is called "decoupling."
There are some factors behind the global decoupling. First of all, the employment and income
situation has been favorable in many countries. In addition, each country strengthened
monetary and fiscal measures in response to the heightening risks of the economic slowdown.
As a result, accommodative financial conditions, tight labor market conditions, and steady
consumer sentiment have been maintained, supporting domestic demand in each country even
with the deceleration in the manufacturing sector. That said, there is no guarantee that this
decoupling will last for a long time. If the slowdown in the manufacturing sector becomes
prolonged, its impact could spread gradually to the nonmanufacturing sector and households.
In contrast, if adjustments in the manufacturing sector mostly come to an end while domestic
demand remains resilient, the global economy is expected to return to a growth path. On this
point, the Bank considers it highly likely that the latter scenario will be realized -- that is, the
global economy will pick up gradually. Let me point out two factors that are the basis for the
realization of this scenario.
The first is that there has been some progress in dealing with the problems that were at the
root of the global uncertainties, such as the U.S.-China trade negotiations and the United
Kingdom's exit from the European Union (EU). If overall uncertainties wane to some degree
in reflection of such progress, firms are likely to take more positive actions, although the
Bank judges that uncertainties regarding the global economy are still significant, as I will talk
about later.
The second is that adjustments in the global manufacturing sector have progressed and
business sentiment has improved (Chart 3). In the IT-related sector in particular, inventory
adjustments have progressed globally and world semiconductor shipments have picked up.
As for the outlook for this sector, demand related to data centers and the 5G network is
expected to increase, thereby pushing up production activity.
The Bank's projection is consistent with those presented by international organizations. For
example, in the IMF's World Economic Outlook Update, the global growth rate is projected
to rise from 2.9 percent for 2019 to 3.3 percent for 2020 (Chart 1).
B. Current Situation of and Outlook for Japan's Economy
Next, I will turn to economic developments in Japan. The slowdown in the growth pace of
the global economy also has affected Japan's economy, mainly through somewhat weak
external demand. Reflecting this slowdown and such effects as of the consumption tax hike
and natural disasters, Japan's economy seems to have briefly registered a significant
deceleration in the October-December quarter of 2019. However, the Bank considers at this
point that such deceleration is temporary and that Japan's economy has been on a moderate
expanding trend. This is based on the assessment that the trend in the three pillars of domestic
demand -- business fixed investment, private consumption, and government spending -- has
been firm. Let me elaborate on this.
I will first talk about business fixed investment. In Japan, it has continued on an increasing
trend (Chart 4). Some manufacturers have postponed investment intended for capacity
expansion due to the slowdown in overseas economies; so far, however, construction
investment has continued to increase and there has been no change in firms' efforts toward
making strategic investment from a long-term perspective. As for the outlook, the Bank
projects that these investments will continue to increase. Regarding construction investment,
in Japan, buildings and structures have been aging in reflection of long-lasting weak
construction investment since the bubble burst in the early 1990s, and potential replacement
demand seems to be high. Such potential demand is likely to underpin construction
investment for a long time in a situation of accommodative financial conditions. In addition,
labor-saving investment in view of demographic changes is expected to continue increasing,
and IT investment seems to be gradually becoming active in a wide range of sectors recently,
including investment related to big data, artificial intelligence (AI), and the Internet of Things
(IoT) that aims at creating new businesses, expanding sales channels, and promoting use for
marketing.1
Next, let me move on to private consumption (Chart 5). For the time being, the effects of the
October 2019 consumption tax hike warrant attention. On this point, private consumption for
the October-December quarter declined considerably, but it should be noted that this decline
is attributable to such factors as natural disasters. Looking at developments in private
consumption excluding these special factors, the impact of the tax hike so far is assessed as
being smaller than that of the previous tax hike in 2014. However, uncertainties regarding the
impact of the tax hike are still significant and are considered one of the risks in assessing
future economic activity. I will touch on this point again later.
Lastly, let me explain developments in government spending. In recent years, there have been
successive natural disasters in Japan.2 At the end of last year, the government formulated the
economic measures for the first time since 2016, with the aim of overcoming natural disasters
and downside risks to economic activity and of providing people with a sense of security for
the future. Owing to the implementation of various measures in this economic package,
government spending, such as on public construction, is expected to continue increasing for
the time being (Chart 6). Moreover, I think that flexible conduct of fiscal policy in response
to economic developments amid a situation where the Bank continues to conduct a large-
scale monetary easing will enhance the synergy effects of monetary easing and fiscal stimulus,
thereby further strengthening economic stimulus effects. Generally speaking, in the case
where a government expands its spending through increased issuance of government bonds,
the mechanism will operate in which upward pressure on longer-term market rates emerges
and gradually restrains such items as private investment. On the other hand, in the case where
a central bank restrains a rise in market rates even amid an expansion in government spending,
the negative impact on private investment will be limited and stronger economic stimulus
effects are expected.3
In sum, the underlying trend in domestic demand has been firm thus far and it is expected to
follow an uptrend. In the Bank's January 2020 Outlook Report, also taking into account that
overseas economies are likely to pick up gradually, Japan's real GDP growth rate is projected
to be 0.8 percent for fiscal 2019, gradually rising to 0.9 percent for fiscal 2020 and 1.1 percent
for fiscal 2021 (Chart 7).
C. Risk Assessments
However, there are uncertainties regarding this baseline scenario, and I would like to
underline the need to closely monitor the downside risks at present.
The first risk factor is developments in overseas economies. Although the United States and
China reached an agreement on the initial trade deal, there remain many deep-rooted conflicts
between the two countries. Attention also should be paid to geopolitical risks surrounding
developments in the Middle East. Recently, there have been heightening uncertainties
regarding the impact of the spread of the novel coronavirus on the global economy. An
indicator that captures global policy uncertainties mainly through the number of news reports
has remained at a high level (Chart 8). Taking these developments into account, it is necessary
to closely examine whether the scenario will be realized in which firms' activities will become
more active through a decline in uncertainties, and in turn trade activity and business fixed
investment also will pick up.
The second risk factor is developments in domestic demand. The effects of the consumption
tax hike on household spending can be divided into two: (1) an increase in demand prior to
the tax hike and a reactionary decline and (2) a decline in households' real income due to the
tax hike. The former seems to have been constrained this time compared to those of the
previous tax hike, partly due to the government's various policy measures (Chart 9). On the
other hand, the effects of the latter could materialize gradually through, for example, changes
in households' spending attitudes -- that is, the propensity to consume. This time, compared
with the previous tax hike, the increase in the net burden on households due to the tax hike
has been constrained owing to various support measures and growth in employee income has
been maintained, and both factors are likely to underpin real income. Looking at indicators
of consumer sentiment that can capture households' spending attitudes relatively early, these
continued to show some weakness before the tax hike, whereas there seems to have been a
pick-up to some extent after the tax hike, mainly led by the category of "overall livelihood"
in the Consumer Confidence Index (Chart 10). However, it is too early to make an assessment
on households' spending attitudes at this point, and we would like to carefully examine
additional data when they become available.
II. Price Developments
Next, I will explain price developments (Chart 11). A sustained decline in prices continued in
Japan for many years. In order to overcome this situation, the Bank introduced quantitative
and qualitative monetary easing (QQE) in 2013 and has pursued a large-scale monetary easing
since then. Subsequently, the economy has improved significantly and the year-on-year rate
of change in the consumer price index (CPI) has taken hold in positive territory. Thus, Japan's
economy already is no longer in deflation in the sense of a sustained decline in prices.
The year-on-year rate of change in the CPI currently is at around 0.5 percent, and this level
is still lower than the price stability target of 2 percent set by the Bank. Although there are
some factors that have been pushing down prices, firms' moves to reflect upward pressure
stemming from such items as personnel expenses and shipping costs in selling prices have
continued, albeit gradually.
The Bank expects that the annual CPI inflation will continue to increase gradually (Chart 12).
The rates of increase in wages and employee income are likely to accelerate gradually, as the
labor market conditions are expected to remain tight with the economy continuing to expand.
Consequently, it is likely that households will accept price rises more easily and firms will be
able to further raise their selling prices accordingly. If wages and prices continue to rise,
people's inflation expectations will increase, leading to a moderate rise in actual prices. It is
projected in the latest Outlook Report that, with this mechanism operating, the year-on-year
rate of change in the CPI excluding fresh food will be 0.6 percent for fiscal 2019, gradually
rising to 1.0 percent for fiscal 2020 and 1.4 percent for fiscal 2021.
However, this baseline scenario of the outlook for prices entails downside risks. Under the
current situation in particular, it is necessary to take into account the possibility that downside
risks to economic activity may materialize and affect prices. Therefore, the Bank will
continue to carefully examine economic and price developments and monitor whether the
mechanism will be maintained in which the inflation rate increases toward the price stability
target of 2 percent.
III. Discussions over Japanification and Economic Growth
A. What is "Japanification"?
Lately, the term "Japanification" of advanced economies has come to be used frequently.4
While it does not really have a clear definition, it often is used to explain the following
situation. In advanced economies, the economic growth rates, the inflation rates, and interest
rates declined after the global financial crisis, and this situation has been lasting. As the
situation of low growth, low inflation, and low interest rates becomes prolonged, the
economy's potential growth rate becomes lower, protracting low growth, low inflation, and
low interest rates for a longer period. Since Japan has experienced this since the 1990s, the
term "Japanification" has been used in the context of warning not to follow in Japan's
footsteps.5
Chart 13 shows developments in Japan's GDP since 1990 from various perspectives in
comparison with other advanced economies. We find the following three points. First, Japan's
economic growth rate in terms of nominal GDP clearly has been lower than that of other
countries. The nominal GDP growth rate started to decelerate in the first half of the 1990s,
and it hardly rose until around 2013. Second, the economic growth rate in terms of real GDP
-- which excludes the effects of price fluctuations -- has been at a low level compared to that
of other countries, but it is not as low as the nominal growth rate. Third, looking at real GDP
per working-age person, Japan's economic growth rate is at around the average level
compared to that of other advanced economies.
Based on this third point, some argue that Japan's economic growth rate is not that bad and
its stagnation, dubbed "Japanification," is exaggerated. However, I would like to stress that
4
At this year's annual meeting of the American Economic Association held in San Diego, California,
there was a session titled "Japanification, Secular Stagnation, and Fiscal and Monetary Policy
Challenges." For details, see https://www.aeaweb.org/webcasts/2020/japanification-secular-
stagnation-fiscal-monetary-policy -challenges.
5
Professor Ito at Columbia University defines Japanization -- the other term for Japanification -- by
using the following four criteria: (1) the actual growth rate is lower than the potential growth rate for
an extended period; (2) the natural real interest rate is below zero and also below the actual real interest
rate; (3) the nominal (policy) interest rate is zero; and (4) the economy falls into deflation, i.e., the
inflation rate is negative. For details, see Ito, T., "Japanization: Is it Endemic or Epidemic?" NBER
Working Paper, no. 21954, 2016.
people's perception of economic growth tends to be formed based on nominal figures. One of
the reasons why the nominal GDP growth rate was low from the 1990s is that prices continued
to decline; in other words, deflation was prolonged. In addition, the unemployment rate went
up under deflation. If those unemployed during the "employment ice age" period had been
employed, Japan's economic growth rate would have been much higher.
B. Importance of Economic Growth
Now, I would like to confirm the importance of economic growth. First of all, on average,
economic growth leads to improvements in people's living standard as well as nutrition and
sanitation levels. Income such as wages, interest, and dividends comes from national output;
that is, GDP. Without GDP growth, people's income will not increase. Let me also note that,
although many problems have been pointed out regarding GDP, no alternatives have been
found easily.6
Second, economic growth brings about employment. In economics, this rule of thumb has
long been known as Okun's law. It says that there is a negative correlation between the
economic growth rate and (change in) the unemployment rate. This means that, when the
economic growth rate rises, the unemployment rate declines accordingly. This relationship is
confirmed in Japan (Chart 14).7 Given that unemployment brings about not only a negative
impact on the economy but also various human and social costs, it is desirable to maintain a
healthy level of employment through economic growth.
Third, economic growth allows for various public services to be maintained. A provision of
public goods -- such as national defense, police services, the judicial system, social security,
6
Net National Welfare and the Human Development Index, which were advocated as alternatives to
GDP in the past, incorporate GDP and income levels. The Social Progress Index is comprised of only
social indicators such as the sanitation level and access to education, but these have a close relationship
with GDP.
7
Okun's law applies to other advanced economies including the United States. For details, see Ball,
L., Leigh, D., and Loungani, P., "Okun's Law: Fit at 50?" Journal of Money, Credit and Banking, vol.
49, issue 7 (2017): 1413-41.
medical services, social infrastructure, fundamental education, and basic scientific research
-- requires financial resources, the scale of which depends on the size of the economy.8
In reality, there are various challenges to economic growth. For example, environmental
pollution and climate change have become global issues. Innovation is essential to reduce the
amount of carbon dioxide emissions, and it requires a certain level of research and
development (R&D) expenditure. In considering the challenges associated with economic
growth, it is important to compare them with the positive effects of such growth.9
C. Declining Population and Economic Growth
Let us get back to the situation in Japan. The population has been declining and society is
aging. The working-age population and total population marked their respective peaks in
1995 and 2008. The ratio of seniors aged 65 years or older to the total population has
continued to rise. Many people doubt that Japan can achieve economic growth in the situation
of the declining and aging population.
Looking back, people used to be concerned about overpopulation. For example, in the first
edition of An Essay on the Principle of Population (1798), Thomas R. Malthus argued that,
even though a population increases geometrically, food increases only arithmetically, and thus
population growth constrains an enhancement in the living standard per capita.
Overpopulation also had been a concern in Japan for a long period until recently.10
In fact, economic growth can be achieved even under a declining population, which might be
a headwind for the economy. Taking the case of Ehime Prefecture as an example, gross
prefectural product has increased moderately in recent years despite a continuing decline in
8
The following argues that economic growth leads to openness, generosity, mobility, and democracy
Friedman, B. M., The Moral Consequences of Economic Growth (New York: Knopf,
in a society:
2005).
9
There are arguments that dematerialization has progressed in advanced economies, whereby, despite
such items as
the economic growth, the consumption of energy and mineral resources as well as the
emissions of carbon dioxide have declined. See McAfee, A., More from Less (London: Simon &
Schuster, 2019).
10
Tadokoro, M., "Jinkōron no hensen" [Overpopulation or underpopulation?: Japan's discourses on
demography in retrospect], Hōgaku kenkyū, vol. 84, issue 1 (January 2011): 63-90.
total population in the prefecture (Chart 15). An international comparison shows that there is
no correlation between the real GDP growth rate per capita and the population growth rate
(Chart 16). Aside from that, there is no correlation between the inflation rate and the
population growth rate either.
Looking from the supply side, sources of economic growth roughly can be divided into three
elements: capital, labor, and knowledge in a broad sense, including technologies and skills.
Among these, knowledge is definitely important in achieving economic growth. In the first
place, before we use capital and labor, we need a certain level of knowledge to decide what
kind of goods and services to produce and consume. Even during the post-war rapid economic
growth period in Japan, the contribution of labor input was small while that of capital and
knowledge was large (Chart 17).
With regard to labor, the current increase in labor force that reflects a decline in the number
of unemployed and an increase in labor participation by women and seniors is favorable.11
Compared to a while ago, seniors have become healthier of late. For example, they now are
deemed to be physically younger by about 5 years in terms of their average walking speed,
and by about 10 years based on their average number of teeth (Chart 18). As for capital, its
contribution to economic growth had been low in Japan during the 1990s, but eventually
business fixed investment has started to expand in recent years.
Knowledge such as people's skills and expertise, science and technology, and education
recently has become more and more important for economic growth. This is indicated by the
recent increase in investments intended for software as well as research and development.
This "knowledge economy" is closely connected to globalization. We tend to think of
globalization as the exchange of goods or services, and it is true that economic problems
stemming from a declining and aging population can be dealt with, for example, by increasing
imports of labor-intensive goods and tourism. However, we should not forget the fact that
globalization also entails the exchange of knowledge.
A declining and aging population could affect economic activity not only through simple
changes in labor input but also through various other channels.12 It also could have an impact
on other factors such as social security.13 Some argue that a declining population leads to a
decrease in the number of those engaged in knowledge production, resulting in an end to
economic growth.14 Further research about the effects of a declining population on economic
growth is still necessary.
D. Role of Monetary Policy
As stipulated in the Bank of Japan Act, the aim of the Bank's monetary policy is "achieving
price stability, thereby contributing to the sound development of the national economy." Of
course, economic growth is supported by the growth policies that have an effect on the supply
side of the economy. However, discussions over Japanification suggest that monetary and
fiscal policies that influence the demand side of the economy and stabilize nominal
expenditure also are important in sustaining economic growth.15
12
See Chart 3 in Wakatabe, M., "Has Japan's Economy Changed?: Challenges and Prospects," speech
at the Japan Society in New York, October 3, 2019, http://www.boj.or.jp/en/announcements
/press/koen_2019/ko191004a.htm/.
13
With regard to various aspects of population, see Morland, P., The Human Tide: How Population
Shaped the Modern World (London: Hodder & Stoughton, 2019).
14
For this argument, see Harding, R., "The Costs of a Declining Population," Financial Times,
January 14, 2020; Jones, C. I., "The End of Economic Growth?: Unintended Consequences of a
Declining Population," NBER Working Paper, no. 26651, 2020. If the economy is close to the end of
economic growth, the role of AI may become more important. For further discussion, see Aghion, P.,
Jones, B. F., and Jones, C. I., "Artificial Intelligence and Economic Growth" in Agrawal, A., Gans, J.,
and Goldfarb, A., eds., The Economics of Artificial Intelligence: An Agenda (Chicago: University of
Chicago Press, 2019), 237-82.
15
Experience of Japanification poses questions to a variety of dichotomies in economics: nominal and
the the
real GDP, short term and long term, as well as business cycle and economic growth. An
increasing amount of research has been conducted regarding the case where a negative shock of
monetary policy could have a long-term negative impact on real GDP if there are hysteresis effects.
As one of the research papers that emphasize the hysteresis effects on capital accumulation and
technological progress, see Jordà, Ò., Singh, S. R., and Taylor, A. M., "The Long-Run Effects of
Monetary Policy," NBER Working Paper, no. 26666, 2020.
IV. Economic Developments in Ehime Prefecture
Now, let me talk about the economy of Ehime Prefecture. The economy has continued to
recover on the whole, although some weakness has been observed in firms' production
activities. With regard to business fixed investment, despite being lower than the level of the
previous fiscal year, when large-scale investments were undertaken, an active investment
stance has been maintained, mainly in investments intended for labor saving, capacity
expansion, and research and development. Public investment has increased, mainly led by
construction related to restoration and reconstruction following the heavy rains that affected
western Japan in July 2018. Private consumption has picked up steadily, albeit with
fluctuations due to the effects of such factors as the consumption tax hike.
Looking ahead, I would like to focus on how to achieve economic growth with a declining
population. In Ehime Prefecture, many efforts have been made to overcome various
challenges.
For example, in the paper and pulp industry of the prefecture -- which is the second largest in
Japan in terms of shipments -- paper-producing firms have made fixed investment aimed at
expanding capacity and enhancing labor productivity to meet buoyant domestic and external
demand. Firms in the maritime and shipbuilding industries, which form the maritime cluster
with numerous relevant firms, have promoted an enhancement of manufacturing capacity and
an expansion in fleet capacity. With the aim of enhancing production efficiency, they also
have made further efforts in research and development and reinforced inter-firm cooperation
to compete with firms abroad.
Moreover, as for citrus fruits, of which Ehime Prefecture is the leading producer in Japan, the
farming system of the Nanyo area was designated as one of the Japanese Nationally Important
Agricultural Heritage Systems, while efforts have been made toward reconstruction following
the damage caused by the heavy rains that hit western Japan in July 2018. In the field of
nationally famous high-grade citrus, it has produced a new cultivar called Beni Princess and
full-scale production is expected. The prefecture also has pushed forward with making high-
value-added products in the primary industry such as in the fishing industry that has the
highest output of marine aquaculture products in Japan and in the rice farming industry. For
example, the original brand rice of the prefecture called Hime-no-rin has been developed. I
have heard that the Research Institute of Agriculture, Forestry, and Fisheries in Ehime
Prefecture spent as long as 16 years to develop this brand rice.
Tourism is also important in terms of capturing demand from outside the prefecture. Let me
take the example of the main building of Dōgo Onsen, which is designated as an important
cultural property and a symbol of Dōgo Onsen hot springs. After more than 120 years since
the last renovation, conservation repair work in consideration of the future has been underway.
Dōgo Onsen has been open for business while being under construction, and I hear that this
is the first attempt in the country. Meanwhile, the prefecture has been making various efforts
to attract visitors, such as the Dōgo Reborn Project. In addition, regular direct flights between
Matsuyama and Taipei were launched last July. Thus, the number of both domestic and
foreign visitors to the prefecture has been firm on the whole. Partly because more flights
between the two areas are scheduled to start operating this April, the number of visitors is
expected to increase further. I hope that the economy of Ehime Prefecture will continue
developing further.
Conclusion
As I mentioned earlier, Japanification has been used as a synonym for low, or negative,
inflation and low growth. After the global financial crisis, the inflation rates declined in
Europe and the United States, but it is noteworthy that the inflation rate in Japan has turned
positive from negative territory since the introduction of a large-scale monetary easing in
2013 (Chart 19).
It is true that Japan's inflation rate has not reached the Bank's price stability target of 2 percent
and the risk that the economy will fall into deflation again has not been dispelled completely.
Given this situation, the Bank has continued with the large-scale monetary easing. Since
around last summer in particular, it has clarified its policy stance of being tilted toward
monetary accommodation, as downside risks to Japan's economic activity and prices have
become significant due to the continued slowdown in the global economy. Since the downside
risks are still significant, the Bank, while continuing to carefully examine various risks, will
not hesitate to take additional easing measures if there is a greater possibility that the
momentum toward achieving the price stability target will be lost.
For now, Japanification is a cautionary tale that teaches us to be vigilant so as not to fall into
prolonged deflation and low growth, but I hope it will be a success story of Japan overcoming
deflation and accomplishing an improvement in the economic growth rate.
Speaking of novels associated with Ehime Prefecture, a famous one is Shiba Ryotaro's Saka
no ue no kumo (Clouds above the Hill), in which the protagonists are Masaoka Shiki and the
Akiyama brothers -- Yoshifuru and Saneyuki -- but he also wrote a historical novel called
Date no kurofune (Date's Black Ship). This is the story of a poor craftsman, Kazō (named
Maebara Kōzan afterward), who lived in the Uwajima clan at the end of the Edo period,
passionately taking in knowledge from overseas and succeeding in building a steamship only
five years and seven months after the arrival of Commodore Perry's black ships. Kazō was so
talented that the founder of Japan's modern army, Murata Zōroku (named Ōmura Masujirō
afterward), who worked with Kazō to build the steamship, is said to have mentioned that he
could be a professor at a university if he lived in Europe. I think Kazō's life is a guide for the
path that Japan should take toward achieving economic growth -- that is, incorporating
knowledge and coping with globalization.
Thank you very much for your kind attention.
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Ehime
February 5, 2020
WAKATABE Masazumi
Deputy Governor of the Bank of Japan
Chart 1
I. Financial and Economic Developments
Global Growth Rate
y/y % chg.
6.0
5.5
5.0
2021: +3.4%
4.5
2020: +3.3%
4.0
3.5
3.0
2.5
2019: +2.9%
Average from 1980 through 2018:
2.0
+3.5%
1.5
1.0
0.5
0.0
-0.5
CY 00 02 04 06 08 10 12 14 16 18 20
Chart 2
I. Financial and Economic Developments
Global Decoupling
between the Manufacturing and Nonmanufacturing Sectors
Nonmanuf