Two policy reports; two different stories
Today, the Bank of Japan (BoJ) released its Monthly Report of Recent Economic and Financial Developments. And on the other side of the globe, the Bank of Canada (BoC) released its quarterly Monetary Policy Report Update. The reports, read side by side, reveal that Japan’s outlook is far worse than is Canada’s.
Here is my take on the two reports:
The BoJ report is nothing short of dismal. Economic conditions have deteriorated “significantly,” where exports “decreased substantially”, corporate profits “continue to deteriorate”, investment “declined substantially”, and consumption has “weakened.” And for an economy that relies so heavily on exports, almost 19% of GDP (the U.S. export market is almost 14% of GDP), a currency that has reached its 14-year high on a trade-weighted basis is not good news.
Chart source: The Bank of Canada’s Monetary Policy Report Update. The numbers in parentheses are the BoC’s projections from the October 2008 Monetary Policy Report.
Originally published at the News N Economics blog and reproduced here with the author’s permission.
One Response to “Two policy reports; two different stories”
We’re certainly in the midst of a once-in-a-lifetime set of economic conditions. The perspective I would bring is not one of recession. Rather, the economy is resetting to lower level of business and consumer spending based largely on the reduced leverage in economy.http://fakesteveballmer.blogspot.com