Source : WAM
Japan’s government has revised upward its economic outlook for the fiscal year ending next March and forecast stronger growth the following year, citing the expected impact of its large-scale stimulus measures on consumption and business investment.
According to the latest projections approved by the cabinet on Wednesday, the economy is now expected to grow by 1.1% in the current fiscal year, up from the 0.7% estimate made in August. The upgrade reflects a smaller-than-anticipated impact from U.S. tariffs.
Economic growth is forecast to pick up to 1.3% in fiscal 2026, supported by solid consumer spending and capital investment, which are expected to outweigh weaker external demand.
The government said private consumption is projected to rise by 1.3% next fiscal year, unchanged from the estimate for fiscal 2025, as tax incentives and easing inflation support household spending.
Capital expenditure is expected to increase by 2.8% in fiscal 2026, accelerating from an estimated 1.9% rise this year. This growth is partly attributed to subsidies and tax breaks designed to encourage investment in areas related to crisis preparedness and long-term growth.
These projections will be used in drafting the next fiscal year’s national budget, which is scheduled to be finalised on Friday.
In November, the government put together a ¥21.3 trillion ($136.7 billion) stimulus package that includes cash handouts for families with children, subsidies to reduce utility costs, and fiscal spending to promote investment in sectors such as infrastructure, artificial intelligence, and semiconductor production.
