BoJ to cut forecast for economic, price growth: report

OCT 3, 20152:40 PM

[TOKYO] The Bank of Japan (BoJ) will this month cut its forecast for both economic growth and inflation amid a slowdown in the global economy and cheaper commodities, a leading newspaper said Saturday.

The central bank will unveil the downward revisions in its biannual outlook for economic activity and prices report due out October 30, the Nikkei business daily said.

BoJ policymakers will downgrade the forecast for economic growth to around one percent from 1.7 per cent for the current fiscal year to March 2016, the daily said. It added that the following fiscal year's growth estimate would also be lowered from 1.5 per cent, but did not give details.

The Nihon Keizai Shimbun - or Nikkei daily, which recently bought the Financial Times for US$1.3 billion - has a track record of financial scoops and is considered a must-read for executives.

With China and other emerging markets slowing, the global economy is seen expanding by only about three percent this year, with little hope of a quick improvement in 2016, it said.

Japanese business investment, consumer spending and other economic activity is holding up well in the Bank's view, but it forecasts that domestic growth may fall somewhat short of expectations, it added.

The central bank is also expected to trim its consumer price growth forecast, from its earlier estimate of 0.7 per cent to less than 0.5 per cent for the current fiscal year in the wake of a slump in crude oil prices, the daily said. The Nikkei did not publish what the specific new forecast.

BoJ policymakers will consider pushing back the bank's expected timeframe for achieving its 2.0 inflation target, now described as around the first half of fiscal 2016 starting in April next year, according to Nikkei.

Central bank chief Haruhiko Kuroda remains upbeat on reaching the promised 2.0 per cent inflation - a cornerstone of Japan's attempt to conquer years of deflation and revive the long-sluggish economy.

But Japanese consumer prices fell 0.1 per cent in August year-on-year, the first decline in over two years, official data showed late September, fuelling speculation that the central bank may unleash a fresh round of stimulus measures.

AFP