MNI BRIEF: IMF Cuts Japan 2024 GDP To +0.3% From July's 0.7%

MNI (TOKYO) - The International Monetary Fund on Tuesday lowered its forecast for Japan’s gross domestic product this year to 0.3% from the 0.7% made in July, but raised its 2025 growth forecast to 1.1% from July’s 1.0%, the IMF’s World Economic Outlook showed.

The projected 1.5% is higher than 1% that a few BOJ board members referred, which is the lower end of a range of 1.0% to 2.5% that BOJ staff estimated. The IMF said that the Bank of Japan’s decision to hike interest rates resulted in a rapid unwinding of Japanese-yen-funded carry trades, which amplified the equity market correction.

The IMF left its global economic growth forecast at 3.2% this year but lowered its 2025 growth forecast to 3.2% from 3.3% made in July. It also said, “Since June, major central banks in advanced economies have started to cut their policy rates, moving their policy stance toward neutral.” It warned that the global outlook is tilted to the downside amid elevated policy uncertainty.