Japan More Conservative On Growth Forecast

Japan’s economy is slowing down. The government just cut its growth forecast for the year, now expecting only 0.7% growth by March 2025 instead of the 0.9% predicted earlier.

Weaker exports are hurting the recovery, following a similar downgrade in July. Even this reduced forecast is still a bit more optimistic than private experts, who expect just 0.5% growth.

This unusual update shows the impact of lower global demand and cautious spending at home.

The Bank of Japan kept interest rates low, hinting it might raise them if the U.S. economy keeps steady, but weak demand could delay those plans. These forecasts will shape Japan’s state budget.

To help households manage rising costs, Prime Minister Shigeru Ishiba is planning a big spending package later this year.