The government has cut its economic growth forecast for fiscal 2019, citing weak exports caused mainly by a slowdown in demand from China.
For the year through March, gross domestic product, or the total value of goods and services produced in the country, will expand 0.9 percent in real terms, the Cabinet Office said Monday, revising downward its forecast from 1.3 percent.
The economy is projected to grow 1.2 percent in fiscal 2020, due to a potential pickup in exports and expectations that consumer and capital expenditures will be solid, a government official said.
The projections are relatively optimistic compared with private sector growth estimates of 0.5 percent for both years.
The projections, based on data as of the end of June, will be used as the basis for government panel discussions on the fiscal 2020 budget.
Exports are projected to grow 0.5 percent this year, slowing from the earlier forecast of 3.0 percent, amid trade tensions between the United States and China.
Private consumption, which accounts for more than half of Japan’s GDP, is estimated to increase 0.9 percent, down from the January forecast of 1.2 percent.
Capital spending is predicted to expand 2.5 percent, compared with 2.7 percent in the previous projection, as firms continue to boost investment amid the labor shortage.
In nominal terms, or unadjusted for inflation, GDP is expected to expand 1.7 percent this year and 2.0 percent in fiscal 2020.
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