Is Japan’s economy slowing too?
That’s what Japanese analysts are saying. A new survey of about 40 major think tanks released Tuesday reported analysts predicting the world’s third-largest economy will grow 1.21% for the year ending March 2016. It’s a big drop from the 1.66% expected in last month’s survey, and the Bank of Japan’s rosy outlook of 1.7% growth.
It’s another sign that Abenomics, Prime Minister Shinzo Abe’s focus on fiscal stimulus, monetary easing and structural reforms to kick-start the economy, is stumbling.
The ESP survey is conducted by a semi-government body and considered Japan’s most comprehensive poll.
Japan’s economy likely contracted an annualized 1.9% in April-June due to weak exports and household spending, a sharp reversal from a 3.9% expansion in the first quarter, a Reuters poll showed. The data will be released on Monday.
If the second-quarter numbers actually come in low, analysts expect the BOJ to revise its growth expectations.
“The question is how big the BOJ’s downgrade will be. The BOJ says the current weakness in consumption is temporary but it’s uncertain whether that’s indeed the case,” Yuichiro Nagai, an economist at Barclays Capital Japan told Reuters.
At this time, few expect this new data will lead the BOJ to cut interest rates.