The economy will pick up in fiscal 2013 as exports recover while the global economy improves, according to a survey of various think tanks.
It is also expected to get a boost from a surge in demand before the consumption tax is hiked to 8 percent from 5 percent in April 2014, they said.
The economy is expected to grow 1.2 percent in fiscal 2013 in price-adjusted real terms compared with the previous year after expanding 0.9 percent in fiscal 2012, according to the average forecast of 11 private economic research institutes. Fiscal 2013 begins in April.
In calendar 2013, Mizuho Research Institute said the economy will likely recover on the back of a moderate rise in exports to China.
In the first half of fiscal 2013, however, consumer spending will gradually pick up after a slump caused by the end of the government’s subsidy program for fuel-efficient “green” cars in September, the institute said. In addition, a recovery in production will likely spur capital spending, it said.
A surge in demand before the tax increase is expected to boost gross domestic product by 0.92 percent in fiscal 2013, according to Daiwa Institute of Research.
But the recession-hit country is expected to remain in deflation because nominal growth is estimated to be 0.9 percent for fiscal 2013, which is short of the projected real growth rate, the average forecast said. Fiscal 2012’s nominal growth is projected to be 0.2 percent.
The government of Prime Minister Shinzo Abe is set to release its own economic outlook for fiscal 2012 and 2013 later this month.