The International Monetary Fund (IMF) has increased its growth and inflation predictions for Japan in its World Economic Outlook published on Tuesday. The IMF now forecasts a 2% economic growth for Japan this fiscal year, marking a 0.6 percentage point rise from the projection made in July. The upward revision is attributed to factors such as pent-up consumption, a rebound in auto exports, and an increase in inbound tourism.
Japan’s consumer prices are also anticipated to surge by 3.2% in 2023 and 2.9% in 2024, surpassing previous predictions. This persistent inflation, although lower than that of the euro area and the US, is leading to conjecture that the Bank of Japan (BOJ) may start to taper its aggressive monetary easing program due to high uncertainties.
The BOJ, as reported by Kyodo News, is expected to convene later this month with a probable upward revision of its price growth outlook on the agenda. The central bank currently foresees inflation peaking this fiscal year before dropping below its 2% target in the following years.
In addition to these forecasts, the IMF predicts a 2.4% increase in Japan's per capita GDP this year, which would be the fastest pace among Group-of-Seven (G-7) nations. This suggests a robust recovery for the Japanese economy amid global economic uncertainty.
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