BOJ Has Seen Cutting Growth Forecasts On Soft Spending Says Ex-central Bank Executive

• The Bank of Japan will likely cut its economic forecasts at its next quarterly review in October, as slowing global demand and a resurgence in COVID-19 infections hurt exports and consumption, the bank's former top economist Seisaku Kameda said on Monday, August 22, 2022.
• Japan's economic recovery is at a "critical juncture" as consumption appears to have stalled during the summer, dashing policymakers' hope households will boost spending with savings accumulated during the pandemic, Kameda told Reuters.
• "There's a chance consumption will stall or only barely grow in the third quarter," as a renewed increase in COVID-19 cases and rising living costs hit households, he said. "The economy's recovery from the pandemic may be under threat," Kameda said the Bank of Japan (BOJ) may cut its growth forecast for the fiscal year ending March 2023 to 2% or lower, from the current forecast of 2.4%, made in July.
• On the price outlook, Kameda said Japan's core consumer inflation may briefly reach 3% later this year due to soaring fuel and food costs. While inflation will moderate next year as the effect of energy costs dissipates, it may still hover around the central bank's 2% target longer than expected as companies continue to pass on rising raw material costs to households, he said.

(Source: Reuters)