Uncertainty of Firms' Medium-term Outlook under the COVID-19 Pandemic (Japanese)

This study, based on original firm surveys conducted before and after the outbreak of COVID-19 in Japan, documents the medium-term outlook and its uncertainty. The results show that, first, the uncertainty related to the outlooks of firms―measured as a subjective confidence interval of their point forecasts―has increased substantially since the onset of the COVID-19 pandemic. The uncertainty over the macroeconomy declined slightly at the end of 2021, but the uncertainty over the firms’ own sales outlook remains high. Second, the uncertainty over the firms’ sales outlook is significantly related to the uncertainty over the macroeconomic outlook, even when the firm fixed effects are controlled. Third, forecasts for the timing of the end of the COVID-19 pandemic are highly dispersed. The forecast over the duration of the pandemic is correlated with the macroeconomic outlook and its uncertainty, but the correlations with firms’ own sales outlook and its uncertainty are not observed.