Japan’s government has cut this year’s economic growth forecast but expects inflation to sharply exceed the central bank’s 2% target in new projections released Thursday, acknowledging growing signs of change in the country’s deflationary mindset.
The estimates come ahead of a Bank of Japan policy meeting next week, set to be closely watched, when the board will produce fresh quarterly forecasts and debate how much progress the economy is making in sustainably meeting its 2% price target.
“Japan’s economy is recovering moderately” with positive signs emerging, such as steady wage hikes and strong corporate spending appetite, Prime Minister Fumio Kishida said.
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