Govt projects 3.2% economic growth

Jiji Press

19:20 JST, December 23, 2021

TOKYO (Jiji Press) — The government Thursday adopted an official projection of 3.2% growth in gross domestic product in price-adjusted real terms for fiscal 2022 from next April.

The government revised up its GDP growth estimate from the 2.2% forecast in July this year, factoring in a boost from large-scale stimulus measures to cushion the impact of the novel coronavirus pandemic.

The new economic outlook, adopted at an extraordinary Cabinet meeting, will be used to calculate the government’s tax revenue estimate in its fiscal 2022 budget proposal.

If the 3.2% GDP growth is realized, it will be the steepest rise since the 3.3% increase in fiscal 2010.

In fiscal 2022, Japan’s real GDP is forecast to hit a record high of ¥556 trillion, against the previous high of ¥554 trillion marked in fiscal 2018.

In nominal terms, the government expects GDP growth of 3.6%.

For fiscal 2021, the government revised down its real GDP growth projection to 2.6% from 3.7%, reflecting steep cuts in automobile production due to a surge in new coronavirus cases in summer this year and supply chain disruptions.

The government delayed its target of bringing the country’s GDP back to the level of October-December 2019, before the novel coronavirus crisis, to January-March 2022 from the end of this month.

The government believes that its new economic stimulus measures with record fiscal spending of ¥55.7 trillion will push up the real GDP by a total of 5.6%, including 3.6% expected for fiscal 2022.

In fiscal 2022, the government expects personal consumption to grow 4% following a 2.5% rise in fiscal 2021 and corporate capital expenditures to rise 5.1% after a 2.5% increase.

The average real GDP growth forecast among private-sector economists surveyed by the Japan Center for Economic Research stood at 2.7% for fiscal 2021 and 3% for fiscal 2022.