Haruhiko Kuroda: Response to COVID-19 and medium- to long-term challenges for Japan's economy - with an eye on the post-COVID-19 era

Speech by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the meeting of Councillors of Nippon Keidanren (Japan Business Federation), Tokyo, 24 December 2020.

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

Introduction

It is a great honor to have this opportunity to address such a distinguished gathering of business leaders in Japan today.

For eight years now, I have delivered a speech at this end-of-year meeting, and I can say that this year we have experienced enormous changes in the social and economic environment due to the shock of the novel coronavirus (COVID-19). As we wrap up 2020, I would first like to take a look back at economic developments this year, mainly focusing on the impact of COVID-19, and talk about the outlook for economic activity and prices. Then, I will explain the Bank of Japan's thinking behind its policy responses. In relation to the conduct of monetary policy, I will also touch on the conduct of the assessment for further effective and sustainable monetary easing, which the Bank decided at the Monetary Policy Meeting (MPM) held last week. Lastly, I would like to talk about what is necessary in taking advantage of lessons to be learned from overcoming the current crisis for future growth - that is, challenges regarding Japan's economy as a whole that should be addressed when also looking ahead to the post-COVID-19 era from a medium- to long-term perspective.

I. Economic and Price Developments during the COVID-19 Era and Their Outlook

Impact of COVID-19 on the Economy

Let me start with a look back at economic developments this year, mainly focusing on the impact of COVID-19.