According to the interim assessment made in January 2013, the Policy Board members’ baseline scenario for Japan’s economy is that it is expected to level off more or less for the time being, and thereafter it will return to a moderate recovery path as domestic demand remains resilient, partly due to the effects of various economic measures, and as overseas economies gradually emerge from the deceleration phase.
Global trade has fallen away, driven by these trends in demand and also a significant disruption in trade finance. For many of the world’s largest economies, the contraction in output in the last quarter of 2008 was the sharpest in decades. Nor is the weakness confined to the major economies.