MNI BRIEF: IMF Ups Japan 2023 GDP View To +1.8% Vs. Oct +1.6%

The International Monetary Fund on Tuesday upgraded its forecast for growth in Japan’s gross domestic product this year to 1.8% from its October estimate of 1.6%, but lowered its 2024 growth forecast to 0.9% from October’s 1.3%.

“Growth in Japan is projected to rise to 1.8% in 2023, with continued monetary and fiscal policy support,” the IMF’s World Economic Output Update said.

“High corporate profits from a depreciated yen and earlier delays in implementing previous projects will support business investment. In 2024, growth is expected to decline to 0.9% as the effects of past stimulus dissipate.”

As for global growth, the IMF said “global growth, estimated at 3.4% in 2022, is projected to fall to 2.9% in 2023 before rising to 3.1%.”

Compared with the October forecast, the estimate for 2022 and the forecast for 2023 are both higher by about 0.2 percentage point, reflecting positive surprises and greater-than-expected resilience in numerous economies, the IMF said.

“The balance of risks to the global outlook remains tilted to the downside, with scope for lower growth and higher inflation, but adverse risks have moderated since the October 2022 World Economic Outlook,” the IMF warned.

“For most economies, the priority remains achieving a sustained reduction in inflation toward target levels. Raising real policy rates and keeping them above their neutral levels until underlying inflation is clearly declining would ward off risks of inflation expectations de-anchoring.”