TOKYO: The Japanese government is considering raising its economic growth forecast for fiscal year 2022 to take into account the effects of its record $490 billion stimulus package, public broadcaster NHK reported on Monday.
In the mid-year review in July, the government had projected a growth of around 2.2% in real gross domestic product (GDP) for the fiscal year beginning April 2022. With the spending package aimed at helping businesses and households cope with the pain of the COVID-19 pandemic, it now forecasts a tailwind of around 5.6% for real GDP from this fiscal year to the next, NHK said.
Japan has lagged other economies in exiting the pandemic-induced recession, forcing policymakers to maintain massive fiscal and monetary support, while other advanced nations dial back crisis-mode policies.
The world’s third-largest economy shrank more than expected in the third quarter, as curbs on the pandemic and global supply disruptions impacted consumption and exports.
Japan’s three massive spending packages to combat the pandemic have left it with outstanding long-term debt that is almost twice the size of its $5 trillion economy.
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