Japan is expected to slightly reduce its forecast for economic growth to 1.0% for the fiscal year ending March 2025 due to a weakening yen causing rising import costs and impacting consumption.
The government releases its economic growth forecasts in January and revises them around July. The revised forecast reflects longer-than-expected impact of rising living costs on consumption.
However, it is still higher than private-sector forecasts as the government hopes that wage hikes and fuel subsidies will boost consumer spending. A survey by the Japan Center for Economic Research suggests gross domestic product growth of 0.44% this fiscal year, much lower than the government’s forecast.
The Bank of Japan is also likely to revise its growth forecast downward in July, which currently stands at 0.8% for the current fiscal year.