Goushi Kataoka: Economic activity, prices, and monetary policy in Japan

Speech by Mr Goushi Kataoka, Member of the Policy Board of the Bank of Japan, at a meeting with business leaders, Kagawa, 27 February 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
18 March 2019

A. Overseas Economies

I would like to start my speech by looking at developments in overseas economies.

After the global economy had grown synchronously since the second half of 2016, differences in growth rates among countries have recently become evident. I consider that overseas economies have now leveled off and are in a state where due attention should be paid to the effects of various risks. According to the January 2019 World Economic Outlook (WEO) Update released by the International Monetary Fund (IMF), as presented in Chart 1, the global economic growth rate is projected to remain around 3.5 percent through 2020. However, when compared with the April 2018 WEO forecast, downward revisions are evident, as seen on the right-hand side in Chart 1. In addition, the global Purchasing Managers' Index (PMI), as shown in Chart 2, has declined to a level seen during the global economic destabilization in 2016 for both manufacturing and services, although they are still above the 50-point level. Thus, the pace of overseas economic growth as a whole for 2019 seems to have weakened compared with that for 2018.

Let me elaborate on current developments by major countries and regions.