statement by kuroda haruhiko, governor of the bank of japan, concerning the bank's semiannual report on currency and monetary control before the committee on financial affairs, house of councillors, on may 26, 2020 introduction the bank of japan submits to the diet its semiannual report on currency and monetary control every june and december. i am pleased to have this opportunity today to talk about recent economic and financial developments and present an overall review of the bank's conduct of monetary policy. i. economic and financial developments i will first explain recent economic and financial developments. the global economy has become depressed rapidly, reflecting the impact of the novel coronavirus ( covid - 19 ) pandemic. economic activity has been disrupted significantly worldwide as a result of preventive measures against the spread of covid - 19 taken by each country and region, such as restrictions on going outside and immigration / emigration. according to the latest world economic outlook released by the international monetary fund ( imf ), the global economy is projected to register large negative growth of minus 3. 0 percent for 2020, which is worse than at the time of the global financial crisis. japan's economy also has been in an increasingly severe situation due to the impact of the spread of covid - 19 at home and abroad, and for the time being, that is likely to remain the case. the year - on - year rate of change in the consumer price index ( cpi ) is expected to be somewhat weak for the time being, mainly affected by the spread of covid - 19 and the decline in crude oil prices. thereafter, as the impact of the spread wanes at home and abroad, japan's economy is likely to improve, supported by accommodative financial conditions and the government's economic measures, as well as through the expected materialization of pent - up demand and a projected recovery in production from the decline brought about by the spread of covid - 19. the year - on - year rate of change in the cpi also is expected to increase gradually. however, the outlook for economic activity and prices is extremely unclear, as it could change depending on the timing of the spread of covid - 19 subsiding and on the magnitude of the impact on domestic and overseas economies, and thus the bank considers that risks are skewed to the downside. meanwhile, global financial and capital markets have become unstable rapidly since late february with deterioration in investors'risk sentiment.

conclude that the political commitment to fiscal discipline should have been much more pronounced during the last few years when the global economy enjoyed broadly robust growth. as the world is entering what looks like a protracted period of lower growth, it will be extremely difficult to keep public debtto - gdp ratios constant, let alone reduce them. 5. conclusion after this very brief fiscal detour let me conclude by returning to albert gallatin. anyone who loves the city of geneva has many reasons to be proud of the achievements of albert gallatin. to my knowledge, he is the only son or daughter of geneva who is honored in the form of a prominent statue in washington d. c. he stands at the entrance of the treasury building, and only a few steps away from the white house. on the statue, he is described simply as a “ genius of finance ”. as secretary of the united states treasury, he made a crucial contribution to the stability and development of the nascent united states financial system. above all, he was deeply committed to reducing the size of the federal public debt during his first seven years in office. only when tax revenues declined, as the threat of war loomed, did he allow debt reduction to be relegated to a secondary objective. see paul r. masson and michael l. mussa, long - term tendencies in budget deficits and debt imf working paper no. 95 / 128, 1995. in spite of the cold war, proxy wars and several wars of independence of colonies, the period after the second world war remains one of relative peace in the developed world, compared with any other period in history. most of the sub - periods during which debt grew fastest have coincided with periods of economic slowdown. but what is remarkable is that we have not generally seen a reduction in debt levels in good times that would match the increases in debt in downturns. what the graph hides is the fact that most of the increase in the average oecd public debt - to - gdp ratio in the late 1990s has been driven by the steep debt increases of japan in the 1990s. taking out japan from the sample shows a slight drop in the average debt ratio during this period. gallatin ’ s debt reduction efforts look even more remarkable when viewed through the prism of current fiscal developments throughout the developed world. if albert gallatin had been in charge of oecd public finances during the decade prior to the onset of the current financial turmoil, we might be in a more comfortable fiscal situation today