MNI POLICY: IMF Cuts Japan 2020 GDP Forecast To -5.8%

     TOKYO (MNI) - The International Monetary Fund on Wednesday lowered its

forecast for Japan's 2020 GDP to -5.8% from April's -5.2% due to the spreading

impact of the coronavirus outbreak.

     The GDP forecast for 2021 was revised down to +2.4% from April's +3.0%.

     "Japan rolled out a massive package of $1.1 trillion (22 percent of GDP) in

late May, amounting to over 40% of GDP when combined with measures decided in

April. The package includes expanded concessional loans to affected firms," the

IMF noted.

     The Bank of Japan board will update its medium-term economic growth and

inflation rate forecasts at the July 14-15 policy meeting through the quarterly

Outlook Report.

     --GLOBAL ECONOMY

     As for the global economies, the IMF noted that "consumption growth, in

particular, has been downgraded for most economies, reflecting the larger-than

anticipated disruption to domestic activity."

     The global growth forecast was revised down to -4.9% in 2020 from April's

-3.0% and the growth forecast in 2021 was also lowered to -5.4% from -5.0%, the

IMF update showed.

     The IMF said, "Growth in the advanced economy group is projected at -8.0

percent in 2020, 1.9 percentage points lower than in the April 2020 WEO."

     "There appears to have been a deeper hit to activity in the first half of

the year than anticipated, with signs of voluntary distancing even before

lockdowns were imposed. This also suggests a more gradual recovery in the second

half as fear of contagion is likely to continue," the IMF said.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMJBJ$,M$A$$$,M$J$$$,MI$$$$]