Article:
TOKYO (Kyodo) -- Japan's economy is on course to make a recovery, but it is likely to be slow in coming due to the lingering effects of the coronavirus pandemic, a summary of opinions from the Bank of Japan released Monday showed.
"Even in fiscal 2022 (through March 2023), the economy is unlikely to return to the level reached before the outbreak of COVID-19," the respiratory disease caused by the virus, one of the nine Policy Board members said at the July 14-15 policy meeting.
The member said, "it will take time for a structural change (to be achieved) through which the economy can overcome the impact of COVID-19."
The central bank released its quarterly economic and inflation outlook report following the two-day policy meeting, saying the country's economy is expected to shrink 4.7 percent in fiscal 2020 but grow 3.3 percent in fiscal 2021.
Ideas:
Most economies around the world will most likely begin to see some kind of recovery in the 3rd quarter, but most likely not as much as hoped for or expected because of a lingering or near second wave of the virus.
Most economies are going to be in a "new normal" meaning economies are restructuring and adjusting to how to deal with the virus situation.
Some industries are not going to be the same, meaning, a complete change, some might just need to weather the storm until some kind of increased economic activity begins to increase.
One example might be the airline industry. If you see the departures and arrivals you see that Haneda airport there are more than 50 percent or more departures and the same with arrivals. 50 percent is not a lot but maybe, for a while, its the new normal.
But the problem is just how full are the flights, 10, 20, 30, 50 percent of capacity?
Again this might be the new normal for a while until more travelers begin to feel safe traveling and or feel safe spending their money going to different places.
Article:
However, another policymaker expressed caution, warning that another wave of the pandemic would further damage the economy.
"We cannot be optimistic about the timing of an economic recovery since it will be delayed further if COVID-19 spreads again," the member added.
A policymaker pointed out that if the impacts of the coronavirus pandemic linger for an extended time, it would further damage company and household finances.
"As time passes, the solvency problems of households and firms could materialize, employed persons not at work may become unemployed, and a vicious cycle from unemployment to less income and spending would emerge," the member said.
Ideas:
Yes, while I try to be very optimistic and try to find the positive in all things, if this virus situation continues governments and companies, for the good or society and all, need to find creative way to keep it going and survive.
Not all workers are able to work at home. Not all companies have the resources to have employees work at home.
Its quite possible Keynesian economics may need to be implemented now more than ever. Meaning governments will need to put people to work to keep the economy moving along. Government type jobs related to improvement of infrastructure, construction, health care, subsidizing companies etc. and putting more money into the economy, whatever it takes to keep the economy moving.
Article:
As for the inflation outlook, many policymakers shared the view that the consumer price will not pick up immediately due to the impact of the pandemic, although the BOJ has maintained its 2 percent inflation target.
"With the pace of economic recovery being moderate, it is unlikely that prices will regain the momentum toward 2 percent inflation within the projection period" through fiscal 2022, one member said.
At the latest meeting, the central bank decided to maintain its corporate support measures totaling 110 trillion yen ($1 trillion) including interest-free loan programs for companies and corporate bond and commercial paper purchases.
The summary of opinions is compiled by Governor Haruhiko Kuroda and does not attribute comments to individual members.
Ideas:
The 2 percent inflation idea or goal has been around for about five years. Yet is hasn't happened yet. And it may never happen. That doesn't mean the Japanese economy can't function well.
The Japanese economy at times seems to defy normal standards of economic growth, and has a mind of its own compared to the global economy or economic growth standards, as we've seen the last 20 plus years.
The so-called lost decade in the 90's was really now a lost decade if see that there was consistent 1 percent growth throughout the decade.
It just ushered in the the term "low growth" meaning the Japanese economy was not growing like it was before in the 60's, 70's and 80's.
Japan had become a "mature" economy and and such was in a mature low growth phase instead of a high growth phase has before.
But has been seen, even in a low growth phase the amount of economy activity is extremely high.
Economies are very complicated organisms. Meaning not all parts or sectors of an economy are the same. There are always going to be some positive areas and some negatives areas.
Of course the virus situation might be causing more negatives than positives, but some areas/sectors/industries will begin to make a comeback sooner than other areas.
But the economy is still about people.You can talk about the overall economy all day but in the end its about people how how they are affected in an individual way.
So the idea that the economy is beginning to slowly recover is very good, but what about the number of families and individuals and how many of them are beginning to feel better about their lives?
Have a nice day and be safe!
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