Japan’s government set to trim economic growth forecast, sources say
2024.07.12 04:34
By Yoshifumi Takemoto
TOKYO (Reuters) – Japan is expected to slightly cut its forecast for economic growth of 1.3% in the fiscal year ending March 2025 as consumption takes a hit from rising import costs due to a weakening yen, two government sources told Reuters.
Japan’s government releases its economic growth forecasts – which serve as a basis for compiling the state budget – in January and then revises them sometime around July.
In revised estimates due next week, the forecast is likely to be cut to about 1.0%, with rising living costs seen weighing on consumption for longer than initially expected, the sources said, asking not to be named because they were not authorised to speak to the media.
The new estimate, however, would still be higher than private-sector forecasts, reflecting government hopes that broadening wage hikes and an extension of fuel subsidies will boost consumer spending.
A survey by the Japan Center for Economic Research, a think-tank, released on Tuesday showed economists expect gross domestic product growth of 0.44% this fiscal year.
The Bank of Japan is also likely to trim this fiscal year’s growth forecast in July, reflecting a rare unscheduled downgrade to historical GDP figures, sources have told Reuters. The central bank currently projects growth of 0.8% in the current fiscal year.
