J u l y 2 9 , 2 0 2 0
Bank of Japan
Japan's Economy and Monetary Policy
Speech at the Japan National Press Club
AMAMIYA Masayoshi
Deputy Governor of the Bank of Japan
Introduction
It is my pleasure to have the opportunity to talk at the Japan National Press Club. Today, I
would like to talk about the Bank of Japan's view on economic and financial developments
at home and abroad, and about its thinking on the monetary policy conduct since March in
response to the impact of the novel coronavirus (COVID-19). I have to say that there are
still extremely high uncertainties over future developments regarding and their
COVID-19
impact on economic activity. It is necessary to make monetary policy responses flexibly,
depending on how the situation turns out. Therefore, in my speech, I would like to place
particular focus on outlining the impact of the spread of on economic activity
COVID-19
and prices, as well as the Bank's thinking on the monetary policy conduct.
I. Economic and Financial Developments at Home and Abroad Affected by
COVID-19
Features of Economic Developments Affected by Infectious Diseases
Global economies, including Japan's, have been subject to pandemics on several occasions.
During pandemics, changes in economic developments are unique and differ from a typical
business cycle. Let me begin by outlining the features of economic developments at
different phases of pandemics.
The first phase is when the infectious disease spreads. In response to a severe pandemic, as
in the current case with the top priority is placed on ensuring people's health
COVID-19,
and safety by containing the spread of the disease. In such a situation, strict public health
measures are conducted, such as restrictions on people's movement and going outside, as
well as orders to suspend business and production activities. Downward pressure on the
economy stemming from these measures is significant since they directly constrain
economic activity.
The second phase is a transition one that is, after the rapid spread of the infectious disease
--
is contained. In this phase, the strict preventive measures conducted in the first phase are
eased gradually. Accordingly, the economy recovers from a state of being significantly
depressed. That said, it does not immediately return to the level reached before the spread of
the disease. In a situation where vigilance against the disease persists, people will continue
to voluntarily make precautionary efforts. Therefore, downward pressure on the economy
will remain. In addition, if there is a resurgence of the disease, the strict public
large-scale
health measures may be reinstated. In this transition phase, it is also necessary to pay
attention to the effects of the significant economic shock in the first phase; in
second-round
other words, the impact on firms' and households' stance on spending. If their stance
weakens significantly, the pace of economic recovery will be even slower. On the other
hand, if a significant weakening in the stance is avoided, economic developments thereafter
may become more firm, mainly through the materialization of demand.
pent-up
After this transition phase, the economy is expected to enter a new phase the
-- so-called
era from a somewhat perspective. There are currently various
post-pandemic -- long-term
discussions on what the economy will be like at that time; in other words, how people's
behavior and the economic structure will change through the impact of the disease or in a
situation where there is a need to live with the disease. I will touch on my view regarding
this again at the end of my speech.
Economic Developments at Home and Abroad and Their Outlook
Domestic and overseas economies affected by have shown developments that
COVID-19
are mostly in line with the aforementioned features.
I would like to look back at economic developments since the turn of this year. Each
country responded to the pandemic by taking preventive measures, such as restrictions on
entry/travel and going outside, as well as orders to suspend business and production
activities. Since economic activities were constrained substantially, the global economy
became depressed significantly in the first half of this year (Chart 1). According to the latest
World Economic Outlook (WEO) Update released by the International Monetary Fund
(IMF), global growth for 2020 is projected to be minus 4.9 percent. In the IMF's forecasts,
the projected growth rate for the global economy registered a negative figure only once
since 1970: minus 0.1 percent during the Global Financial Crisis. Although there were no
statistics of the same kind before then, and therefore it is not possible to make a precise
comparison, the IMF judges that the projected growth rate in the latest WEO shows the
largest decrease since the Great Depression in around 1930, exceeding the negative figure
registered at the time of the Global Financial Crisis. In Japan, reflecting the increase in the
number of confirmed cases from March, the government declared a state of emergency in
April. Exports, including inbound tourism consumption, have declined significantly due to
entry/travel restrictions in each country and to the significant depression in overseas
economies. Private consumption, mainly in services such as eating and drinking as well as
accommodations, decreased significantly due to self-restraint from going outside and
conducting businesses. The real GDP growth rate for the quarter of 2020
January-March
was minus 2.2 percent on an annualized basis, and that for the
quarter-on-quarter April-June
quarter also is likely to be substantially negative. As can be seen from these developments,
both domestic and overseas economies became depressed significantly due to the impact of
the spread of in the first half of 2020.
COVID-19
Although domestic and overseas economies have continued to be in extremely severe
situations, many countries have been resuming economic activities gradually and the
situation has slightly changed from what it was before (Chart 2). The diffusion indices (DIs)
for business sentiment on a global basis have remained below 50, which is the borderline
between improvement and deterioration of business conditions perceived by firms, but they
have picked up after bottoming out in April. In Japan, the state of emergency was lifted
nationwide in late May and economic activity has resumed gradually thereafter. Looking at
the DI for business conditions in the June 2020 Tankan Economic Survey of
(Short-Term
Enterprises in Japan), business sentiment has deteriorated significantly but is expected to
bottom out. Based on various sources, such as indicators, statistics
high-frequency
published by industry organizations, and anecdotal information from firms, although
consumption activities are still at low levels, they seem to be gradually heading toward a
from June. The spread of has not yet subsided on a global basis and
pick-up COVID-19
there is concern over the risk of a resurgence of in countries where the spread
COVID-19
has subsided, including Japan. Under these circumstances, although a recovery path of
domestic and overseas economies has not yet come into sight clearly, the economies seem
to be starting to enter a transition phase toward recovery.
Future developments in economic activity could continue to change unexpectedly
depending on the consequences of However, based on the assumption that a
COVID-19.
second wave of will not occur on a large scale, as a baseline scenario, the global
COVID-19
economy is expected to fully enter the transition phase and head toward a recovery (Chart
1). The IMF projects that the global economy will recover from the second half of 2020 and
the growth rate will be 5.4 percent for 2021. Japan's economy also is likely to improve
gradually from the second half of this year. However, as I mentioned earlier, while the
impact of COVID-19 remains, voluntary efforts to prevent infections will continue to
constrain economic activity, and thus the pace of improvement is expected to be only
moderate.
I have pointed out that, in a transition phase, it is necessary to pay attention to the impact of
a significant economic shock brought about by infectious diseases on firms' and households'
stance on spending. On this point, it is inevitable that corporate profits, employment, and
income will be affected by However, in response to the impact of
COVID-19. COVID-19,
the government has conducted economic measures with a project size of 234 trillion yen,
which largely exceed the size of measures taken at the time of the Global Financial Crisis.
In addition, as I will explain later, the Bank has made efforts to support financing and
maintain stability in financial markets by enhancing monetary easing to a large extent.
These responses by the government and the Bank have provided strong support for
sustaining businesses and employment. I will elaborate on this, focusing on both the
corporate and household sectors.
Let me start with the corporate sector (Chart 3). Corporate profits have deteriorated,
reflecting the decline in sales due to In this situation, pressure that reduces
COVID-19.
business fixed investment seems to be strong, mainly for sectors that are severely affected
by That said, looking at the business fixed investment plan in the June Tankan,
COVID-19.
business fixed investment is expected to remain positive on an annual basis for fiscal 2020.
Although it is necessary to pay attention to the possibility that figures for the business fixed
investment plan will be revised downward if uncertainties over continue, the
COVID-19
investment is likely to be steady at this point compared with a significant decline in
corporate profits. Based on anecdotal information from firms, they are likely to continue to
undertake many of their to projects, such as research and development
medium- long-term
(R&D) and investments. This is because the financial positions of firms became
IT-related
more sound after the Global Financial Crisis, and many firms have adequate financial
capacity to undertake necessary investment for growth areas even when they are faced with
severe stress. In addition, together with the measures currently taken by the government and
the Bank to support financing, financial institutions have been actively responding to meet
firms' increasing demand for funds, and this seems to have eased pressure that reduces
business fixed investment.
Next, let us look at the household sector (Chart 4). The employment and income situation
has been weak. The active job ratio has declined and the
openings-to-applicants
unemployment rate has risen to around 3 percent. The rate of change in total
year-on-year
cash earnings per employee has shown a relatively large decline recently. For the time being,
the number of employees is expected to follow a decreasing trend and the rate
year-on-year
of change in total cash earnings is projected to be negative. That said, the employment
adjustment subsidies, which have been expanded as part of the government's economic
measures, are expected to somewhat halt job cuts. The government's and the Bank's
measures to support financing are likely to help prevent firms from going bankrupt and
discontinuing their businesses, thereby supporting employment. In fact, the number of
bankruptcies of firms has not increased thus far.
Thus, active macroeconomic policies taken in response to seem to have reduced
COVID-19
the effects of a shock brought about by to a certain extent, and
second-round COVID-19
have supported firms' and households' stance on spending. However, as seen in the case
where firms' behavior became cautious for a prolonged period after the financial crisis in
Japan in the 1990s, there is a risk that a large shock will lead to a decline in firms' and
households' growth expectations and make their spending behavior cautious. While bearing
this in mind, it is necessary to carefully monitor future developments.
In the July 2020 Outlook for Economic Activity and Prices (Outlook Report), the Bank
made public the outlook for Japan's economic growth rate (Chart 5). The thinking behind
the projection is what I have explained thus far. According to the forecasts of the majority of
the Policy Board members for the growth rates, the economy is projected to register
significant negative growth in the range of minus 5.7 to minus 4.5 percent for fiscal 2020,
but grow at a relatively high level ranging from 3.0 to 4.0 percent for fiscal 2021 and then
continue to grow in the range of 1.3 to 1.6 percent for fiscal 2022.
That said, this outlook entails high uncertainties and risks are skewed to the downside.
Above all, the consequences of and their impact on domestic and overseas
COVID-19
economies are highly unclear. In addition, the aforementioned outlook is based on the
assumptions that a second wave of will not occur on a large scale and that a
COVID-19
resultant reinstatement of the strict public health measures will not take place, but these
assumptions entail uncertainties.
Difference from the Global Financial Crisis
Before I move on to the next topic, I would like to explain the difference between the
current shock and the Global Financial Crisis in 2008. At the time of that crisis, the nature
of the problem was that, triggered by the bursting of the global financial bubble, major
financial institutions abroad went bankrupt successively and the functioning of the financial
system declined significantly. What made the problem worse was a vicious cycle in which a
decline in the functioning of the financial system led to deterioration in the real economy,
which in turn affected stability in the financial system in the form of an increase in
loans.
non-performing
In contrast, the current shock is caused by the spread of This is the same
COVID-19.
situation as experienced with the Global Financial Crisis, in that a decline in demand and
weak production activity affect corporate financing and that developments in financial and
capital markets can easily become unstable due to increasing uncertainties over the outlook
for economic activity. However, the big difference between then and now is that the
financial system has maintained its stability on the whole this time. Since the Global
Financial Crisis, efforts have been made internationally to enhance the robustness of the
financial system, and thus financial institutions have considerable resilience in terms of both
capital and liquidity. Because the financial system is stable, the Bank's and the government's
measures to support financing through private financial institutions can work effectively.
Under these circumstances, although financing, mainly of firms, has been under stress, the
environment for external funding, such as bank borrowing and the issuance of CP and
corporate bonds, has remained accommodative (Chart 6). Issuance spreads for CP and
corporate bonds expanded temporarily but have narrowed of late, and the year-on-year rate
of increase in their amount outstanding has continued to be at a relatively high level. That in
the amount outstanding of bank lending also has registered the highest growth in about 30
years. At the time of the Global Financial Crisis, with the amount outstanding of CP and
corporate bonds becoming lower than the previous year due to the strengthening of
investors' risk aversion, downward pressure on the real economy from the financial side
intensified amid the situation of banks' cautious lending attitudes. However, such
developments have been avoided this time. It is expected that stability of the financial
system will not be hampered significantly and the economy will be supported from the
financial side. That said, it is necessary to closely monitor future developments because, if
the real economy deteriorates for a prolonged period, this could affect the financial system
and the vicious cycle that I mentioned earlier could start operating.
Price Developments
Now, I will explain price developments in Japan (Chart 7). The rate of change
year-on-year
in the consumer price index (CPI) for all items less fresh food is likely to be negative for the
time being.
With economic activity remaining at a low level due to the impact of
COVID-19, it is expected that prices of goods and services that are sensitive to economic
activity will be pushed down. Crude oil prices, which declined significantly compared to a
while ago, are projected to push down the CPI through energy prices.
That said, when excluding the effects of energy prices, the inflation rate has remained
marginally positive thus far. The inflation rates for food products and daily necessities that
are sold at supermarkets have increased at relatively high levels. Although those for some
items such as charges for accommodations have shown a relatively large decline, firms'
behavior that aims at stimulating demand through price reductions as seen
price-setting --
during the deflationary period in the past is not observed widely at this point.
--
From a somewhat perspective, with the economy improving, downward pressure
long-term
on prices is projected to wane gradually and the effects of the decline in energy prices are
likely to dissipate. Under these circumstances, the rate of change in the CPI is
year-on-year
expected to turn positive (Chart 5). In the latest Outlook Report, the forecasts of the
majority of the Policy Board members for the CPI are in the ranges of minus 0.6 to minus
0.4 percent for fiscal 2020, 0.2 to 0.5 percent for fiscal 2021, and 0.5 to 0.8 percent for
fiscal 2022. Thus, the rate of change in the CPI is likely to increase gradually.
year-on-year
That said, it is unlikely that the inflation rate will approach the price stability target of 2
percent with momentum during the projection period since rapid recovery in demand can
hardly be expected.
Thus far, I have explained the baseline scenario of the outlook for prices, but I would like to
note that it is difficult to assess the impact of on prices. Even among economists,
COVID-19
whether the impact will be deflationary or inflationary is a controversial subject. A decline
in demand due to the impact of exerts downward pressure on prices of goods
COVID-19
and services. I think that the impact of on prices through the demand side will
COVID-19
be relatively large, but it also will be exerted on the supply side, mainly due to restructuring
supply chains and limiting the number of customers to avoid crowds. In case of
supply-side
constraints, upward pressure could be exerted on prices. For example, firms that limited
their number of customers could choose to keep or raise their prices to secure profits. Thus,
there are unusual uncertainties over how firms will set their prices reflecting the impact of
and their behavior warrants attention.
COVID-19, price-setting
II. The Bank's Conduct of Monetary Policy
Next, I would like to explain the Bank's conduct of monetary policy. In response to the
impact of the Bank considers it important in terms of monetary policy to ensure
COVID-19,
smooth financing, mainly of firms, and maintain stability in financial markets. On this basis,
it has enhanced monetary easing since March and implemented three measures to achieve
the following objectives (Chart 8).
The first is to support financing, mainly of firms. To this aim, the Bank introduced the
Special Program to Support Financing in Response to the Novel Coronavirus
(COVID-19).
The total size of this program is about 120 trillion yen. Specifically, this program consists of
(1) purchases of CP and corporate bonds with the upper limit of about 20 trillion yen, which
is equivalent in size to a quarter of the domestic market, and (2) the Special
Operations to Facilitate Financing in Response to the Novel Coronavirus
Funds-Supplying
(COVID-19), which is a fund-provisioning measure to encourage financial institutions'
lending, mainly to firms. Through the latter operation, the Bank provides funds on favorable
terms to private financial institutions that make loans in response to and the
COVID-19,
size of this operation will be about 100 trillion yen at maximum. In this operation, the Bank
also cooperates with the government. That is, when effectively and unsecured
interest-free
loans, which are based on the government's economic measures, are provided mainly to
small and firms through private financial institutions, the Bank provides
medium-sized
funds to such institutions on favorable terms.
The second is to maintain stability in the financial markets. In order to achieve this, the
Bank has adopted a framework through which further ample yen and foreign currency funds
can be provided in a flexible manner. As for the yen funds, with a view to maintaining
stability in the bond market and stabilizing the entire yield curve at a low level, the Bank
decided to purchase a necessary amount of Japanese government bonds (JGBs) without
setting an upper limit, removing the indicative figure of an annual pace of increase in the
amount outstanding, which was about 80 trillion yen. Regarding foreign currency funds, the
Bank has provided a large amount of U.S. dollar funds in cooperation with five other major
central banks.
The third is to lower the risk premia in asset markets, and the Bank therefore decided to
actively purchase funds (ETFs) and Japan real estate investment trusts
exchange-traded
The aim of this measure is to prevent firms' and households' sentiment from
(J-REITs).
deteriorating through volatility in asset markets, thereby supporting positive economic
activity.
These powerful monetary easing measures have exerted positive effects. Although financial
and capital markets at home and abroad are still nervous amid high uncertainties over
economic activity, tension has eased recently. In addition, as I mentioned earlier, although
corporate financing has remained under stress, the environment for external funding such
--
as bank borrowing and the issuance of CP and corporate bonds has stayed
--
accommodative, owing to various measures taken by the Bank and the government, as well
as active efforts made by financial institutions together with those measures.
In responding to an emergency situation such as the current one, policy cooperation
between the government and the central bank is effective. In fact, many countries have
made policy responses in such a manner. The Bank's responses that I explained earlier take
into account such effectiveness as well. That said, there are various opinions about the roles
of fiscal and monetary policies in cooperating with each other. Let me make clear these
roles by focusing on two points.
The first is about the roles in purchasing JGBs. The government's aggressive fiscal
measures and the Bank's monetary easing measures can have synergistic effects; namely, of
a policy mix of monetary and fiscal policies. That said, the Bank's purchases of
so-called
JGBs are being conducted as part of monetary policy, and thus do not represent monetary
financing of government debt. Further active purchases of JGBs decided in April were also
based on the need for the conduct of monetary policy. That is, it aims at maintaining
stability in the bond market as well as stabilizing the entire yield curve at a low level with a
view to controlling and interest rates.
short- long-term
The second point is about the roles in supporting financing. In response to the current
situation, the government and the Bank have taken various measures to support financing,
and the government's measures and the Bank's measures have worked
fund-provisioning
together effectively. On this basis, as for measures that take into account the solvency
problem, the government has established programs through which credit guaranteed loans
as well as capital and funds can be provided. With regard to effectively
quasi-capital
and unsecured loans provided through private financial institutions, the credit
interest-free
risk of the loans is covered by credit guarantees. On the other hand, the fundamental role of
the central bank is to provide liquidity. In fact, the Bank has been supporting financing,
mainly of firms, while fulfilling this function. Taking into account the differences in the
roles, the Bank will continue to pursue what it should do as a central bank.
The Bank will continue to make efforts to provide financing support and maintain stability
in financial markets through the three measures that I mentioned earlier. In doing so, I have
to note that there are high uncertainties over the impact of on the economic and
COVID-19
financial side. Thus, for the time being, the Bank will closely monitor the impact and will
not hesitate to take additional easing measures if necessary.
Conclusion
Today, I talked about developments in economic activity and prices affected by COVID-19
and about the enhancement of monetary easing since March in response to the impact. To
conclude, I would like to share my thoughts about the discussions on how, from a somewhat
perspective, could lead to changes in people's behavior and in the
long-term COVID-19
economic structure.
Some argue that economic activity after the pandemic will not return to the same level as
before. It cannot be denied that demand could decrease as people's behavior becomes
cautious. However, there is a possibility that things will turn out to be different when taking
a somewhat perspective.
long-term
To start with, changes in people's behavior may create new demand for goods and services.
Since the outbreak of reforms such as teleworking have gained
COVID-19, working-style
momentum. Efforts to conduct activities online also have been moving ahead in fields such
as education and medical care. If digitalization accelerates as a result, this will create
demand for both hardware and software. In terms of private consumption, there have been
changes such as increasing demand for home delivery services. Many may try to restructure
supply chains. In doing so, not only efficiency but also safety and crisis management will
likely be taken into account. In line with this, demand may also be created through firms'
decisions to move factories and other sites back home.
Another possibility is that the issue of could lead to further innovation by, for
COVID-19
example, actively using information and communication technology to prevent infections as
well as undertaking investments to meet new demand. While the importance of the potential
of information and communication technology has been highlighted in the past, its use
appears to have further accelerated for the purpose of preventing infections. Amid such
changes, I believe it is necessary to push forward with efforts that will lead to enhancement
in productivity even after COVID-19 subsides.
The recent experience of could also encourage innovation in terms of payment
COVID-19
systems by further increasing interest in cashless and digital payments. The Bank also needs
to rigorously examine a payment system suitable to the digital economy. In this regard,
central bank digital currency (i.e., digital currency issued by the central bank) is
so-called
one important matter for consideration. The Bank currently has no plans to issue central
bank digital currency. However, since the environment is changing extremely rapidly,
mainly in terms of trends in technology, I think the Bank needs to shift up a gear and press
ahead with examining this matter in order to prepare to respond in an appropriate manner
when necessary. For this reason, the Bank took a concrete step last week and established a
section called the Digital Currency Group that is tasked with examining these matters. This
group aims to deepen its understanding of central bank digital currency in terms of the
features of functioning and technological feasibility through conducting experiments. It also
will examine matters regarding central bank digital currency while cooperating with other
central banks and with relevant entities at home and abroad.
Thus, behavioral changes due to the impact of also have positive aspects, in that
COVID-19
they may lead to the creation of new demand and further innovation. From a
long-term
perspective, how well we can take advantage of these positive changes is key in projecting
future developments in economic activity.
The Bank recognizes that, to this end, it is important to maintain accommodative financial
conditions and ensure economic and financial stability during the current phase. These are
also important for Japan's economy to return to a steady growth path.
Thank you for your attention.
Japan's Economy and Monetary Policy
Speech at the Japan National Press Club
July 29, 2020
AMAMIYA Masayoshi
Deputy Governor of the Bank of Japan
Chart 1
I. Economic and Financial Developments
IMF's World Economic Outlook (June 2020)
y/y % chg.
2021: +5.4%
6
5
4
3
2
1
0
-1
-2 Global Financial Crisis
-0.1%
-3
2020: -4.9%
-4
Contraction during the Great Depression (1929-32):
IMF's
-5
about -10%
projections
-6
CY 00 02 04 06 08 10 12 14 16 18 20
Source: IMF.
Business Sentiment
Global PMI
Business Conditions DI (Tankan)
s.a., DI DI ("favorable" - "unfavorable"), % points
40
60
All industries
Manufacturing
55
Firms'
Nonmanufacturing
projections
20
50
45
0
40
-20
35
Manufacturing
"Favorable"
30
Services
-40
"Unfavorable"
25
20
-60
CY
18 19 20 18 19 20
CY
Note: In the left chart, figures for manufacturing are the "J.P.Morgan Global Manufacturing PMI" and those for services are the "J.P.Morgan Global Services Business Activity Index."
Sources: IHS Markit (© and database right IHS Markit Ltd 2020. All rights reserved.); Bank of Japan.
2
Chart 3
I. Economic and Financial Developments
Corporate Sector
Corporate Profits
Business Fixed Investment Plan
y/y % chg.
s.a., %
7 20
Private non-residential investment
(SNA basis, nominal)
Ratio of current profits to sales
Tankan (actual)
15
6
Ratio of operating profits to sales
Tankan (planned investment in current fiscal
year as of the June survey of each year)
10
5
5
4
0
3
-5
2
-10
1
-15
0 -20
CY FY
05 07 09 11 13 15 17 19 05 07 09 11 13 15 17 19
Notes: 1. Figures in the left chart are based on the Financial Statements Statistics of Corporations by Industry, Quarterly and exclude "finance and insurance." Figures from 2009/Q2 exclude
"pure holding companies."
2. In the right chart, the Tankan figures include software and R&D investments and exclude land purchasing expenses (R&D investment is not included until the December 2016 survey).
The figures are for all industries including financial institutions and holding companies, etc. (figures up to the March 2020 survey exclude holding companies, etc.).
Sources: Ministry of Finance; Cabinet Office; Bank of Japan.
Household Sector
Labor Market Conditions
Nominal Wages
s.a., ratio
s.a., % y/y % chg.
7 1.8
2
Unemployment rate (left scale)
1.6
Active job openings-to-applicants
6
ratio (right scale)
0
1.4
5
1.2
-2
Special cash earnings (bonuses, etc.)
1.0
4
Non-scheduled cash earnings
0.8 Scheduled cash earnings
-4
Total cash earnings
3
0.6
2 0.4
-6
05 07 09 11 13 15 17 19
CY 09 10 11 12 13 14 15 16 17 18 19 20
Note: In the right chart, Q1 = March-May, Q2 = June-August, Q3 = September-November, Q4 = December-February. Figures from 2016/Q1 are based on continuing observations following
the sample revisions.
Sources: Ministry of Internal Affairs and Communications; Ministry of Health, Labour and Welfare.
4
Chart 5
I. Economic and Financial Developments
The Bank's Forecasts for Economic Activity and Prices
(July 2020 Outlook Report)
y/y % chg.
CPI
Real GDP
(all items less fresh food)
-5.7 to -4.5 -0.6 to -0.4
Fiscal 2020
[-4.7] [-0.5]
Forecasts made in April
-5.0 to -3.0 -0.7 to -0.3
2020
+3.0 to +4.0 +0.2 to +0.5
Fiscal 2021
[+3.3] [+0.3]
Forecasts made in April
+2.8 to +3.9 0.0 to +0.7
2020
+1.3 to +1.6 +0.5 to +0.8
Fiscal 2022
[+1.5] [+0.7]
Forecasts made in April
+0.8 to +1.6 +0.4 to +1.0
2020
Notes: 1. These figures show the forecasts of the majority of the Policy Board members and those in brackets indicate the medians. The forecasts are constructed as follows: each Policy
Board member's forecast takes the form of a point estimate -- namely, the figure to which she or he attaches the highest probability of realization. These forecasts are then shown as
a range, with the highest figure and the lowest figure excluded. In the April Outlook Report, each Policy Board member made their forecasts as a range and submitted two figures
within the range of 1.0 percentage point at most.
2. The direct effects of the October 2019 consumption tax hike on the CPI for fiscal 2020 are estimated to be 0.5 percentage point.
The direct effects of policies concerning the provision of free educati