The Japanese government has raised its economic growth forecast to 4.0% by 2021 with the expectation that the recent stimulus package will speed up the economic recovery process.
|Japan has just passed an economic stimulus package of 708 billion USD. In the photo: Headquarters of the Central Bank of Japan. Photo: AFP|
The Cabinet Office of Japan this morning, December 18, predicted that the real GDP of this country will increase 4.0% in the upcoming fiscal year, starting April 2021. This is a sharp adjustment compared to the 3.4% growth forecast in July 2020.
Raising the growth forecast to 4.0% for fiscal year 2021 is the largest annual growth adjustment in the history of growth data since 1995, according to the Cabinet Office of Japan.
The basis for Japan to raise the growth forecast for the fiscal year 2021 is the fiscal stimulus package of 708 billion USD, which was approved earlier this week to quickly revive the economy falling into recession in the second quarter of 2020.
Although it is expected that the economy will return to its normal level as before the Covid-19 epidemic in the first quarter of 2022 thanks to widespread policy support, but The Japanese government still showed up be careful about the risks.
A Japanese Cabinet Office official said that policymakers should closely follow the risks that the economy will face, including external risks from the Covid-19 pandemic and the impact of move to capital markets.
The above economic forecast will be used by the Japanese Government as a basis to “close” the budget for fiscal year 2021. With the current fiscal year ending in March 2021, the Government of Japan has lowered the budget. reported GDP decline to 5.2%, the strongest decline ever, according to Reuters. Previously, the Japanese government forecasted the world’s third largest economy to decline 4.5% in fiscal year 2020.
The consumer price index (CPI) in Japan still fell due to weakening domestic demand and the campaign to reduce prices and stimulate tourism demand that the Government of this country is implementing. Japan’s CPI in fiscal year 2020 is forecast to drop 0.6%, more than double the rate previously forecast.
In fiscal year 2021, Japan revised its CPI forecast to rise by 0.4%, instead of 0.5% as forecasted earlier.