Gov’t Forecasts 1.8% real GDP growth for FY 2018

December 19, 2017

Tokyo- Japan's gross domestic product in fiscal 2018 is now projected to grow 1.8 percent year on year in price-adjusted real terms, up from the previous estimate of 1.4 percent made in July, the government's latest economic outlook showed Tuesday.

The Japanese economy's growth in the year through March 2019 would be led by domestic demand, such as capital investment and personal spending, according to the outlook adopted at the day's cabinet meeting.

On the back of strong overseas economies, Japan's exports are expected to stay firm, the government also said.

Meanwhile, the unadjusted nominal growth rate estimate was left unchanged, at 2.5 percent, reflecting tardy progress of inflation.

In line with the growth rate estimate, the country will see its nominal GDP expand to an all-time high of 564.3 trillion yen, closer to the government-set target of 600 trillion yen for around 2020.

The latest fiscal 2018 outlook also showed that personal spending would increase 1.4 percent from the year before in real terms thanks mainly to improvements in employment and income situations, higher than a 1.2 percent rise forecast for fiscal 2017.

Capital expenditures are estimated to grow 3.9 percent on expectations for firms to step up investment in technologies to cover labor shortages, up from 3.4 percent.

Exports are seen to post a solid rise of 4.0 percent, although the increase is smaller than 4.8 percent projected for the current fiscal year.

The government forecast the consumer price index would grow 1.1 percent in fiscal 2018, after rising an estimated 0.7 percent in fiscal 2017.

The economic projections will be used to estimate the government's tax revenues for compiling its fiscal 2018 budget.

Meanwhile, the government raised its fiscal 2017 real growth estimate from July's 1.5 percent to 1.9 percent. Jiji Press