Japan expects growth to accelerate next year supported by fiscal stimulus

Tokyo, December 25 / WAM / The Japanese government revised upward its economic forecasts for the fiscal year that will end next March, and expected growth to accelerate in the following year, amid estimates indicating that the massive stimulus package it has adopted will boost consumption and capital spending.

According to the latest estimates approved by the Japanese Cabinet yesterday, Wednesday, the government expects the economy to grow by 1.1% in the current fiscal year, up from August’s forecast of 0.7%, after the impact of US customs duties was less than expected.

Growth is expected to accelerate to 1.3% in fiscal year 2026, as strong consumption and capital spending offset weak external demand.

The Japanese government said that it expects consumption to rise by 1.3% in the next fiscal year, which is the same pace expected for fiscal year 2025, given that tax exemptions and stable inflation will support household spending.

Capital spending is likely to rise by 2.8% in fiscal year 2026, which is faster than the estimated increase of 1.9% for the current fiscal year.

The government prepared a stimulus package worth 21.3 trillion yen ($136.7 billion) last November that included payments to families with children, subsidies to reduce basic household utility bills, and financial spending to boost investment in areas such as infrastructure, artificial intelligence, and semiconductor chips.

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