MNI BRIEF: IMF Cuts Japan 2024 GDP View To +0.7% Vs. Apr 0.9%

The International Monetary Fund on Tuesday lowered its forecast for Japan’s gross domestic product this year to 0.7% from April's 0.9%, but left its 2025 growth forecast at 1.0%, the IMF’s World Economic Outlook Update showed.

“In Japan, the negative growth surprise stemmed from temporary supply disruptions linked to the shutdown of a major automobile plant in the first quarter,” the IMF said.

“The momentum on global disinflation is slowing, signaling bumps along the path. This reflects different sectoral dynamics: the persistence of higher-than-average inflation in services prices, tempered to some extent by stronger disinflation in the prices of goods.”

As for Japan, the IMF said, the strong shunto wage settlement is expected to support a turnaround in private consumption starting in the second half. "But the expectation for 2024 growth is revised downward by 0.2 percentage points, with the downward adjustment largely reflecting temporary supply disruptions and weak private investment in the first quarter.”

The IMF left its global growth forecast at 3.2% this year, but raised the growth forecast in 2025 to 3.3% from 3.2% made in April.