Japan government to consider cutting this year's growth forecast, sources say
Japan's government will consider cutting its economic growth estimate for the current fiscal year ending in March 2026 due to the expected hit to global demand from U.S. tariffs, three government sources told Reuters by Wednesday.
The current projection of an 1.2% expansion, made at the end of last year, could be pushed down to below 1%, the sources said on condition of anonymity as they were not authorised to speak publicly.
The government will finalize projections around the end of July, taking into account developments on U.S. tariffs, the sources said.
Japan's tariff negotiator Ryosei Akazawa is arranging his seventh visit to the United States for as early as June 26, the Yomiuri newspaper reported on Tuesday. Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump agreed to push ahead with trade talks when they met in Canada but failed to achieve a tariff deal.
The government produces economic growth estimates twice each year with one made around summer used as a basis for drafting the state budget for the following fiscal year.
In its latest quarterly projections released on May 1, the Bank of Japan cut its economic growth forecast for fiscal 2025 to 0.5% from 1.1%, reflecting the expected hit from U.S. tariffs.
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