Makoto Sakurai: Economic activity, prices, and monetary policy in Japan

Speech by Mr Makoto Sakurai, Member of the Policy Board of the Bank of Japan, at a meeting with business leaders, Hyogo, 27 November 2019.

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

I. Economic Activity at Home and Abroad

A. Recent Developments in Overseas Economies

Let me start with developments in overseas economies.

The global economy has continued to grow moderately, but the pace of growth has been decelerating since the start of 2019. According to the October 2019 World Economic Outlook released by the International Monetary Fund, the global growth rate for 2019 is projected to be 3.0 percent, a lower rate compared to 3.8 percent for 2017 and 3.6 percent for 2018 (Chart 1). The continued deceleration is mainly due to a significant slowdown and stagnation in world trade volume caused by the intensified U.S.-China trade conflict. This has exerted downward pressure on the Chinese economy, which is one of the hubs of global supply chains, and its effects are spreading across the global economy, including Japan.