The Japanese Cabinet Office submitted its latest medium-to-long-term economic and fiscal projections earlier today
- Inflation seen reaching 2% during fiscal year 2023 in its most optimistic scenario (previously fiscal year 2022)
- Real growth reaching around 2%, nominal growth about 3.2% to 3.4% over the medium-to-long-term under most optimistic scenario
- Inflation is not seen reaching 2% through fiscal year 2028, will hover below 1% in baseline scenario
- Real growth reaching a little over 1%, nominal growth about 1.2% to 1.5% over the medium-to-long-term under baseline scenario
The government cites current lower levels of inflation as a reason for the delay under its most optimistic scenario. In January, the government already cut its projection for a similar scenario by pushing it back from fiscal year 2021 to fiscal year 2022.
As for growth projections, the baseline scenario also saw a downgrade in nominal growth as January projections had it pinned for about 1.5% to 1.7% over the medium-to-long-term.
This just further reinforces the notion that confidence is waning in Japan as the economy continues to struggle to boost price pressures and maintain more solid economic growth amid ongoing global uncertainties still prevailing.
