“Japan’s economy is large and diverse, so changes to Olympic plans will generally have limited impact on short-term growth prospects,” he said in a written interview Wednesday.
He pointed out that most of the infrastructure needed for the Olympics has already been developed, and the impact on the growth of the end of inbound tourism will be small. “If canceled, it should be noted that it will have an undue impact on Tokyo’s service sector, particularly small and medium-sized enterprises,” he said.
Analysis based on the study found that the cancellation of the Olympics could push down sales growth by more than 5 percent and may require government support.
In its world economic outlook released this month, the IMF forecasts Japan’s growth rate for this year. increased to 3%. Strong exports and large-scale fiscal growth are expected to support growth.
“Like all countries, Japan’s growth prospects are accompanied by significant underlying risks stemming from the state of the new corona at home and abroad and uncertainty over vaccinations,” the deputy director said.
The Bank of Japan’s policy inspections was welcomed as a “step in the right direction” to address the cost of prolonged easing. On the other hand, he pointed out that inflation would fall below 2 percent over the medium term due to the pandemic of the new coronavirus and the low potential growth rate that weakens the effects of monetary easing.
“A broader assessment of how comprehensive economic policies such as finance, finance, structure, and deregulation will play out towards sustainable economic growth and achieving the 2 percent inflation target will probably be needed in the future,” it said.
In March, the Bank of Japan established a new measure to reduce side effects if it dug deeper into negative interest rates, but Mr. Breck said it was unlikely that the BoJ would dig deeper, saying, “This scheme suggests that the BoJ is ready to dig deeper into negative interest rates, which in itself represents a help in forwarding guidance. But unless deflationary pressures increase, interest rates will not be cut in the near future.”