TOKYO (Reuters) – Japan is expected to slightly cut its economic growth forecast to 1.3 percent for the fiscal year ending March 2025 as consumption is hit by rising import costs due to a weaker yen, two government sources told Reuters.
The Japanese government releases its economic growth forecast in January, then revises it around July.
The forecast is likely to be lowered to around 1 percent in revised estimates due next week as rising living costs weigh on consumption for longer than expected, said the sources, who asked not to be named because they are not authorized to speak to the media.
The new estimate, however, would be higher than that of the private sector, reflecting government hopes that rising wages and expanded fuel subsidies will boost consumption.
A survey released Tuesday by the Japan Center for Economic Research, a think tank, showed economists expect gross domestic product to expand 0.44 percent this fiscal year.
The Bank of Japan is also expected to cut its growth forecast for the current fiscal year in July, reflecting a rare unscheduled downward revision to historical GDP figures, sources said.
The central bank currently forecasts growth of 0.8% for the current fiscal year.
(Reporting by Yoshifumi Takemoto, written by Leika Kihara; by Diana Mandiá, edited by Augustin Turpin)
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