Japan's Cabinet Office releases its mid-year economic projection for the current fiscal year
- Nominal growth forecast seen at 1.7%
- Previously 2.5%
- Inflation estimate remains at about 1.1%
- Fiscal year 2019 real growth estimated at 1.5%
- Fiscal year 2019 nominal growth estimated at 2.8%
- Fiscal year 2019 inflation estimated at 1.5%
Q1 GDP growth was poor, as the economy shrank for the first time in 2 years. But that's not part of the report here as the fiscal year begins in April 2018. Even so, Q2 data hasn't showed much of a significant rebound relative to Q1 data and this is probably giving a bit of a rethink to the forecasts that were released in January.
Do remember that Japan is set to go with introducing a sales tax hike in fiscal year 2019, and that will also come into consideration as it is expected to dampen economic growth. The sales tax introduced back in 2014 prompted the economy to enter a technical recession, so it remains to be seen if the government can introduce one if the economy is stuttering in the quarters leading up to it.
