Risks to Economic Activity There are high uncertainties over the baseline scenario of the outlook for economic activity, which I have explained thus far. The biggest risk factors are the consequences of COVID-19 and their impact on domestic and overseas economies.
In the Bank's outlook, it is assumed that the impact of COVID-19 will almost subside in the middle of the projection period, which is through fiscal 2023, due mainly to progress with vaccinations. However, the pace of vaccine rollout and the effectiveness of the vaccines entail uncertainties, and thus there is a risk that downward pressure on economic activity will increase.