Japanese Economy: Analysis and Forecasts, No.130

Outlook improves thanks to a rebound in private consumption and exports but Japan’s economic recovery lags behind others

▶ Japan’s Q3 real GDP contracted an annualized +21.4% QoQ.

▶ We have updated our forecast for real GDP growth to -5.4% in FY 2020, and +3.8% in FY 2021.

▶ We forecast a core CPI inflation of -0.4% in FY 2020, and +0.5% in FY 2021.Although the decline in energy prices has decelerated, the consumption tax hike as well as the government’s free childcare program and the partial elimination of tertiary education fees will both put downward pressure on CPI inflation.

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