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Japan raises economic growth forecast to 1.6%

Japan’s government has slightly raised its economic growth forecast for the current fiscal year to 1.6%, up from a previous estimate of 1.3%. This uptick is attributed to strong external demand, bolstered by a recovery in inbound tourism and auto manufacturing, the latter previously impacted by chip shortages. Growth is projected to slow to 1.3% in the next fiscal year starting in April, due to a decrease in external demand and a rebound in domestic consumption. The government’s projections, slightly more optimistic than private-sector forecasts, serve as a basis for policy and budget planning. Inflation is expected at 3% this fiscal year, moderated by energy subsidies, and is predicted to slow to 2.5% next year.


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