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BOJ’s Kuroda warns of uneven global recovery from pandemic By Reuters

© Reuters. FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda speaks at a news conference in Tokyo, Japan, December 19, 2019. REUTERS/Kim Kyung-Hoon/File Photo

By Leika Kihara

TOKYO (Reuters) -Bank of Japan Governor Haruhiko Kuroda on Monday said the unevenness of the world’s recovery from a coronavirus-triggered recession could lead to an increase in savings, economic inequality and indebtedness.

“The trio of increased savings, inequality and debt is considered to be intertwined in practice and may theoretically reduce the natural interest rate,” Kuroda said in a speech to a BOJ-hosted academic conference.

As the global economy emerges from the pandemic’s initial hit, the role of central banks will shift from providing liquidity support to helping companies stay solvent, he said.

“The nature of the policy responses will … shift from temporary first aid measures to medium- to long-term structural policies,” Kuroda said. “In this sense, we are seeing a widening in the scope of issues that central banks should take into account.”

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