Japan’s government has downgraded its growth forecast for the current fiscal year 2024 from 1.3% to 0.9%.
This adjustment comes as inflation continues to impact private consumption, which accounts for over half of the economy. Private consumption growth is now expected to be just 0.5%, a significant drop from the January forecast of 1.2%.
Various one-off factors, including safety test scandals in the auto industry, have also contributed to this downgrade.
However, the economy is expected to rebound in fiscal 2025 with a growth rate of 1.2%.
Consumer prices are now forecast to rise by 2.8% in fiscal 2024, an increase from the earlier expectation of 2.5%.
The government has also adjusted its assumption for Yen, now expecting it to remain around 158.8 per Dollar for the current fiscal year, weaker than the previous estimate of 149.8 Yen.
