MNI: Japan Cabinet Sees Record GDP Growth Of 3.2% In FY22

Japan's economy could expand at a record 3.2% pace next fiscal year, the Cabinet Office forecast on Thursday, as the Liberal Democratic Party led by Prime Minister Fumio Kishida gears up for the biggest budget in history that includes a massive stimulus package and recovers from pandemic lockdowns.

Consumer spending could rise 4.0% and capital investment gain 5.1% in the fiscal year starting 1 April, with the unemployment rate expected to fall to 2.4% from a forecast of 2.8% for this fiscal year, the Cabinet Office said. The government’s forecasts assume that the dollar trades at JPY114.1.8 in the fiscal year, but that is not an official exchange rate forecast.

Still the government, like the Bank of Japan, could adjust to continued supply-side restrictions, higher raw material prices and pandemic disruption from the Omicron variant hitting financial and capital markets and at home and abroad.

The BOJ will review its growth forecast in January, see: MNI STATE OF PLAY: BOJ Stays Covid Easy As Policy Lags Big CBs.