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Bank of Japan board member Hitoshi Suzuki on Thursday said that the country needs to remain vigilant on combating the pandemic as risks grow that economic activity, mainly for consumption, could deviate from the baseline scenario.
"If the effects of supply-side constraints are prolonged or amplified by more than expected, there is a risk that economic activity will deviate further downward from the baseline scenario, particularly in the first half of the projection period,” Suzuki told business leaders in Kobe City. “Attention also should be paid to a risk that the effects of supply-side constraints seen in some areas will be amplified or prolonged."
But he said that as "the impact of Covid-19 wanes, demand imbalances and production and shipping bottlenecks are likely to head toward a resolution.”