Japan revises down GDP growth rate to 3.7%

The Cabinet Office said at a meeting of the Council on Economic and Fiscal Policy on Tuesday that Japan's GDP will expand about 3.7 percent in real terms, excluding price fluctuations.

The figure is down 0.3 percentage points from the previous estimate that the Cabinet approved in January.

But the government said GDP will this year return to levels seen before the coronavirus pandemic, as the figure for last fiscal year was better than expected. Previously, the government said GDP would recover this fiscal year, ending in March 2022.

In the meeting, Prime Minister Suga Yoshihide said GDP will likely surpass pre-pandemic levels this year, and hit a record high next fiscal year.

Suga said participants in the meeting pointed out that vaccinations can help speed up normalization of economic activities and make further economic growth possible. He added that the government will do all it can to get people vaccinated as soon as possible.

The participants also discussed basic guidelines for next year's draft budget. Suga said he wants to focus on investments to create a green society, promote digital transformation, revitalize local regions and tackle population decline.