The Japanese government raised the country’s economic growth in fiscal 2022 to a real 3.2 percent from the previously estimated 2.2 percent on Thursday. Following a weaker-than-anticipated improvement in the current year, the latest upgrade comes as it expects the pace of recovery from the coronavirus pandemic-caused slump to pick up.
According to reports, the projected pace of growth in the country’s gross domestic product will be used as the basis for the government’s tax revenue estimates as it draws up the draft budget for fiscal 2022 starting April. Prime Minister Fumio Kishida’s Cabinet is set to approve the same on Friday.
The country’s upcoming initial budget for fiscal 2022 is expected to reach around 107.6 trillion yen ($950 billion).
The Cabinet on the other hand had cut the GDP growth rate projection for the current fiscal year from 3.7 percent to 2.6 percent over the continued economic fallout from the pandemic due to the recurring cases of infections.
According to government official, they had originally expected the country’s GDP in current fiscal would return to its pre-pandemic level in the October-December period of 2019. However, the goal is likely to be pushed back to March.
It is also been expected that in fiscal 2022 the size of GDP in real terms may reach 556.8 trillion yen.
According to a survey conducted by the Japan Center for Economic Research earlier this month, it was found that the GDP growth forecast for the next fiscal year is somewhat higher than the average 3.0 percent increase.
The government expectations for next year –
• In nominal terms, the government expects the economy may likely expand 3.6 percent to a record 564.6 trillion yen in fiscal 2022, upgraded from an earlier projection of 2.5 percent.
• Private consumption is expected to increase 4.0 percent in the next fiscal year, unchanged from the previous estimate.
• It now expects the capital expenditure to rise a real 5.1 percent, higher than a 4.2 percent expansion forecast made in July.
• While exports benefiting from the global economic recovery in fiscal 2022 are forecast to rise 5.5 percent, following expected growth of 11.4 percent in fiscal 2021.