TOKYO: The Japanese government has cut its forecast for the country’s economic growth in fiscal 2023 by 0.2 percentage point to 1.3 pct in inflation-adjusted real terms, the Cabinet Office said Thursday.

The downward revision came as the country’s exports in fiscal 2022, which ended last March, were lower than the government’s estimate due to the resurgence of COVID-19 in China in the second half of the year.

For fiscal 2024, the government agency expects Japan’s real gross domestic product to rise 1.2 pct, believing that the pace of economic growth will be moderate amid elevated prices.

The overall consumer price index, including fresh food prices, is projected to rise 2.6 pct in fiscal 2023, against a 1.7 pct increase estimated earlier. The CPI growth is estimated at 1.9 pct for fiscal 2024.

The latest projections were submitted at a meeting of the government’s Council on Economic and Fiscal Policy.

“Due attention should be paid to the impact on real household income from rising prices,” Prime Minister Fumio Kishida said at the meeting.

“While closely monitoring price trends and their impact on people’s lives, we’ll act for the benefit of consumers,” he said.

Due to rising prices, the Cabinet Office cut its fiscal 2023 forecast for personal consumption growth to 1.6 pct from 2.2 pct. Capital spending is now forecast to rise 3.0 pct, down from a 5.0 pct increase projected earlier.

Real GDP is estimated at 555 trillion yen for fiscal 2023 and 562 trillion yen for fiscal 2024, higher than the record of 554 trillion yen marked in fiscal 2018. Real GDP totaled 548 trillion yen in fiscal 2022.

In nominal terms, Japan’s GDP is expected to grow 4.4 pct in fiscal 2023, a 32-year high, and 2.5 pct in fiscal 2024.

Nominal GDP is estimated at 601 trillion yen in fiscal 2024, exceeding 600 trillion yen for the first time on record due to higher prices.

JIJI Press