Japanese Government Forecasts Economic Growth Rate Slowing to 1.3% Next Year

The Japanese government has projected the real economic growth rate based on Gross Domestic Product (GDP) for fiscal year 2024 (April 2024 to March 2025) at 1.3%.

On the 22nd, a pedestrian is passing in front of the Tokyo stock market status board in Japan. [Image source=Yonhap News]

On the 26th, the Cabinet Office of Japan released a report titled "Economic Outlook and Basic Attitude toward Economic and Fiscal Management," which included the government's official stance and forecast.

According to the report, Japan's economic growth rate is expected to slow from 1.6% in 2023 to 1.3% in 2024.

The nominal GDP for the next fiscal year is projected to increase by 3.0% to approximately 615 trillion yen.

The yen/dollar exchange rate assumed in the calculation of next year's forecast is 149.8 yen per dollar.

In the report, the Japanese government emphasized that "the Japanese economy is facing an opportunity to escape deflation (a decline in prices amid economic stagnation) through positive movements such as high wage increases and strong investment motivation," and stated that "economic and fiscal management for the next fiscal year will aim for growth driven by private demand, escape from deflation, and the realization of a virtuous cycle of growth and distribution."

Since the economic outlook figures included in this report also serve as the basis supporting the budget plan, they generally reflect the policy intentions of the Japanese government.

Earlier, on the 23rd, the Bank of Japan lowered its real GDP growth forecast for 2023 from 2.0% to 1.8%, while raising the forecast for 2024 from 1.0% to 1.2%.