The Bank of Japan yesterday boosted its inflation and economic growth projections for the world’s third-largest economy as it eyes an end to years of deflation.
The semi-annual report, which came as the BoJ stood pat on new policy measures, estimated 2.9 percent growth in the economy for the fiscal year to March, up from an earlier 2.3 percent projection made in January.
It also tipped inflation to hit 0.7 percent, also up from an earlier 0.4 percent projection. “Japan’s economy has stopped weakening and has shown some signs of picking up,” the BoJ said in its report, pointing at a likely rise in business investment and private spending as consumer sentiment improves.
The bank said there was also likely to be a spike in demand ahead of tax increases that would see Japan’s national sales tax double to 10 percent by 2015 as Tokyo tries to pay down a huge national debt as social security costs soar due to a rapidly ageing population.
Also yesterday, the BoJ held off announcing any new policy measures as it wrapped up its first meeting since unveiling a huge stimulus package this month aimed at stoking the economy and beating years of falling prices.
In a brief, two-paragraph statement the central bank said its widely expected decision to stand pat was reached by a unanimous vote by its board.
Earlier yesterday, the tough task ahead for the bank and government in their fight against deflation was highlighted by March data showing core consumer prices, which exclude volatile prices of fresh food, fell 0.5 percent on-year.
Source : Qatar Chronicle
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