Jan 07 (NHK) - Economists predict that Japan's economy will grow more than 1 percent in inflation-adjusted terms in fiscal 2025. They see wage increases giving a boost to consumer spending.
The Japan Center for Economic Research compiled forecasts by 37 private-sector economists for the fiscal year that starts in April. They predict average real growth of 1.1 percent. That's more optimistic than the projection for the current fiscal year of 0.4 percent.
The forecasts see wage growth outpacing prices, helping a recovery in personal consumption.
The consumer price index excluding fresh food is expected to rise slightly more than 2 percent, a slower pace than in fiscal 2024.
But the projections also note downsides. They include potential tariff hikes by the incoming US administration of Donald Trump. Such a move would cool economic growth around the world.
A prolonged downturn in China's economy would also have negative repercussions in Japan.
Mitsubishi UFJ Research & Consulting Principal Economist Kobayashi Shinichiro pointed to the threat from a rise in trade conflicts between the US and China: "If trade friction escalates between the two countries, then their economies will slow. That would reduce demand for Japan's exports, likely hitting its economy hard."
In the domestic economy, Japan's government has said it will encourage small and medium-sized companies to raise wages.
This is to try and establish a virtuous economic cycle of prices and wages rising together.
