MNI BRIEF: IMF Ups Japan 2023 GDP View To +2.0% Vs. July +1.4%

The International Monetary Fund on Tuesday upgraded its forecast for Japan’s gross domestic product this year to 2.0% from its July 1.4%, but left its 2024 growth forecast at 1.0%.

“For Japan, policy rates for the medium term [2026–28] are revised upward, reflecting changes to the country’s yield-curve-control framework, and long-term rates are revised upward accordingly,” the IMF’s World Economic Outlook stated.

The report expects pent-up demand, a surge in inbound tourism, accommodative policies, and an auto export rebound to drive Japan's GDP.

The outlook noted global headline inflation will continue to decelerate to 5.9% y/y in 2023 and 4.8% in 2024 from 9.2% in 2022 as central banks maintain a tight stance. Many countries are near their tightening peak, the outlook stated.

“The real estate crisis could deepen further in China, an important risk for the global economy,” the IMF warned. “While some of the extreme risks – such as severe banking instability – have moderated since April, the balance remains tilted to the downside.” The IMF left its global growth forecast unchanged at 3.0% this year, but lowered the growth forecast in 2024 to 2.9% from July’s 3.0%.