TOKYO — The Japanese government is expected to upgrade its real growth forecast for fiscal 2018 with an expanding global economy seen boosting exports and capital investment expected to remain firm.
The projection could even reach 2%, up from the 1.4% forecast this summer. The Cabinet Office will determine a figure later this month through consultations with the Ministry of Finance and others. Since the growth outlook is used to estimate tax revenues, it may affect the compilation of the fiscal 2018 draft budget.
Japan’s revised real growth rate for the July- September period was an annualized 2.5%, the second straight quarter of relatively high growth after April-June’s 2.9%. Building on these results, the government is also expected to upgrade its outlook of 1.5% growth for the current year ending in March, which was issued over the summer.
The government’s latest economic data also suggests an improvement. The Economy Watchers Survey, released Friday by the Cabinet Office, showed that business sentiment among taxi drivers, store clerks and other frontline workers was brightening, with November’s seasonally adjusted diffusion index rising 2.9 points from the previous month to 55.1, the highest level since January 2014.
The government upgraded its overall assessment for the first time in two months, saying the economy is recovering moderately.
The survey covered some 2,000 people.