Japan Govt Downgrades Growth Outlook; Forecast Inflation To Exceed BoJ Target
(RTTNews) - Japan's government downgraded the economic growth outlook for the current fiscal year on weak exports, but upwardly revised the forecast for inflation on strong wage hikes and it is now seen above the Bank of Japan's target.
The government, led by Premier Kishida Fumio, forecast the economy to grow 1.3 percent in the current fiscal year ending March 2024, which was revised down from 1.5 percent estimated in January.
The Japanese economy is recovering moderately, the Cabinet Office said. The government assessed that private demand will strengthen with improvements in employment and income.
Underpinned by strong consumption and capital expenditure, economic growth is seen at 1.2 percent in the fiscal 2024.
The government lifted its consumer price inflation forecast to 2.6 percent in the current fiscal year from the prior outlook of 1.7 percent. That is above the Bank of Japan's target of 2 percent. For the fiscal 2024, inflation is seen at 1.9 percent.
The upward revision to inflation projections triggered debate over exiting the current ultra-loose monetary policy.
The government projections came ahead of the central bank's policy announcement on July 28. The BoJ is also slated to publish its quarterly outlook report outlining the view on GDP and inflation.
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