The Japanese government is considering increasing its growth forecast for FY22 to + 3.0% or more – Yomiuri

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TOKYO, Dec. 21 (Reuters) – Japan is considering raising its 2022 real gross domestic product (GDP) growth forecast to 3.0% or more after considering the impact of a record $ 317 billion supplementary budget, reported the Yomiuri newspaper.

The projection would be an increase from a forecast for real GDP growth of 2.2% for the fiscal year beginning April 2022, which was published in a semi-annual review in July.

“Projected growth numbers are not overly optimistic given continued growth thanks to relaxed restrictions and a high vaccination rate,” said Saisuke Sakai, chief economist at Mizuho Research and Technologies.

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“Still, it doesn’t seem to take much into account the risks surrounding the Omicron (variant) and another wave of the COVID-19 outbreak next year.”

Cabinet should approve the new forecast on Thursday, Yomiuri said. The update comes after Parliament on Monday approved the additional budget of 36 trillion yen ($ 316.73 billion) for the current fiscal year. Continue reading

Japan is lagging behind other advanced nations in overcoming a slump caused by the coronavirus pandemic, forcing policymakers to maintain massive fiscal and monetary support even if crisis mode policies are rolled back elsewhere.

“The pressure to increase government spending is mounting as the ruling party faces the upper house elections next summer,” said Sakai, adding that accelerating consumer inflation could further fuel the trend.

The Bank of Japan kept its ultra-loose monetary easing unchanged in its rate review last week in December, with the exception of the partial cut in emergency funding for pandemics. Continue reading

The world’s third largest economy declined an annualized 3.6% in the third quarter after a resurgence of COVID-19 cases in the summer, leading to new restrictions that put a brake on growth, especially private consumption.

The government will likely lower its forecast for growth in FY2021 from previously expected 3.7% to around 2.5%, Yomiuri said, adding that it will likely lower its forecast for a return to pre-coronavirus levels beyond the end of the year will move.

($ 1 = 113,6600 yen)

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Reporting by Daniel Leussink and Kantaro Komiya; Editing by Jane Wardell and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.


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