The Japanese government will raise its economic growth predictions for next fiscal year as it sees stimulus measures driving a recovery from recession, according to Japanese media reports.
The government will raise its real gross domestic product forecast for the year that starts in April to 2.5 percent, according to separate reports today from Kyodo News and the Nikkei newspaper. They didn’t say where they got the information. Nominal GDP will grow 2.7 percent in the year, according to the reports.
In August, the Cabinet Office released a forecast for 1.7 percent real and 1.9 percent nominal GDP growth in the year.
Updated forecasts will be released on Jan. 28, the Asahi newspaper reported yesterday, without saying where it got the information.
Earlier this month, the government of Prime Minister Shinzo Abe said it would spend 10.3 trillion yen ($114 billion) to boost growth. The fiscal measures will increase GDP growth by about 2 percentage points and create about 600,000 jobs, the government said on Jan. 11.
The government this week raised its assessment of the economy for the first time in eight months. Goldman Sachs Group Inc. this week raised its growth forecast for next fiscal year to 2 percent from 1.2 percent.
Japan’s GDP shrank at an annualized 3.5 percent pace in the third quarter of last year after contracting in the three months through June, meeting the textbook definition of a recession. The median estimate of economists surveyed by Bloomberg News is for a 0.6 percent contraction in the three months through December 2012, with growth this quarter seen at 1.6 percent.
The Bank of Japan said this week that it will shift to Federal Reserve-style open-ended asset purchases from January 2014 and target the achievement of 2 percent inflation “at the earliest possible time.”