Skip to main content

Output to fall more than during global financial crisis

Lockdowns will soon be imposed across much of Japan, triggering a decline of more than 10% in economic activity this quarter. The government’s latest fiscal package is intended to help firms stay afloat and to maintain employment while lockdowns are in place. But even with this support, the coronavirus outbreak will leave a legacy of persistent demand weakness that will put downward pressure on wages and prices for the next couple of years. Monetary policy is close to its limits, but the Bank of Japan may yet respond with a small further reduction in its policy rate.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access