Japan government unveils bullish GDP growth estimates for fiscal 2019

Vastavam web: Japan’s government forecast on Friday the economy will grow faster than private-sector projections in fiscal 2019, with exports, domestic private consumption and capital spending expected to offset the hit from a planned sales tax hike.The Cabinet Office’s projections, presented at the Council on Economic and Fiscal Policy – the government’s top economic panel, showed the economy was likely to grow 1.5 percent in price-adjusted real terms in the fiscal year starting in April 2019. It is expected to expand 2.8 percent in nominal terms.

The government’s lofty growth estimates highlight Prime Minister Shinzo Abe’s desire to secure higher tax revenue as he attaches greater importance to growth than austerity to revive the economy and restore tattered public finances, analysts say.“The government’s projections seem to underestimate uncertainty over the global economy and domestic labour shortages,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.“A trade war between the United States and its trading partners could weigh on global growth, which would in turn exert downward pressure on Japan’s export-led economy.”