Japan’s government still sees overall inflation remaining below the Bank of Japan’s 2% price target next fiscal year, despite accelerating price gains this year.
(Bloomberg) — Japan’s government still sees overall inflation remaining below the Bank of Japan’s 2% price target next fiscal year, despite accelerating price gains this year.
The country expects price gains including fresh food to be 1.7% in the fiscal year 2023, unchanged from its mid-year estimate, according to Cabinet Office forecasts released Thursday. Expectations that inflationary pressures will peak out, and government measures to cut energy bills next year will cap prices were behind the forecast, according to a cabinet office official.
The estimate is in line with BOJ Governor Haruhiko Kuroda’s latest view that inflation will slow next year, giving some room for the central bank to continue with its policy despite sharply rising speculation that a policy pivot may be approaching.
Separately, the government expected the economy to reach a record for the first time since the beginning of the pandemic. Prime Minister Fumio Kishida’s stimulus package is forecast to have some positive impact on growth.
- Here are the projections for fiscal 2023:
- Real GDP: +1.5% versus previous +1.1% estimate
- Real economy at 558.5 trillion yen ($4.2 trillion) will reach a record high for the first time since the pandemic
- Nominal GDP: +2.1% versus previous +2.2% estimate
- Unemployment rate: 2.4% versus previous 2.3% estimate
- Real GDP: +1.5% versus previous +1.1% estimate
- For fiscal 2022:
- Real GDP: +1.7% versus previous +2.0% estimate
- Nominal GDP: +1.8% versus previous +2.1% estimate
- Overall CPI: +3.0% versus previous +2.6% estimate
- Unemployment rate: 2.5% versus previous 2.4% estimate
- NOTE: Click here for mid-year estimates released in July
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