Japan’s Economic Outlook for Fiscal Years 2023 to 2025 (February 2024)

■Summary

＜Real growth rate: FY2023, 1.2%; FY2024, 1.0%; FY2025, 1.1%＞

In the October–December quarter of 2023, the real GDP grew at an annualized rate of ˗0.4% from the previous quarter, which marked the second consecutive quarter of negative growth. This decline was primarily due to a drop in domestic demand. Despite the normalization of socioeconomic activities following the reclassification of COVID-19 as a Class 5 disease, both private consumption and capital investment declined for the third consecutive quarter.
Projections indicate that the real GDP growth will be 1.2% in FY2023, 1.0% in FY2024, and 1.1% in FY2025. In the second half of FY2024, a shift to domestic demand-led growth is expected. Moreover, real-wage growth is anticipated because of a slowdown in the inflation rate.
The nominal GDP continues to outpace the real GDP. The nominal GDP growth in FY2023 is expected to reach 5.2%, the highest in 32 years. Furthermore, the nominal GDP is projected to exceed 600 trillion yen in FY2024.
Consumer prices (excluding fresh food) are expected to rise to 2.8% in FY2023, 2.1% in FY2024, and 1.5% in FY2025. While the increase in the prices of goods has slowed down, the prices of services have risen to the 2% seen the previous year. The high prices of services are likely to persist, as companies continue to pass on the higher labor costs associated with wage increases to their consumers.

■Index

1．Annualized negative growth in the October–December quarter of 2023
　　・Exports are not expected to drive the economy
　　・Revenge consumption is subdued
　　・The spring wage offensive of 2024 is expected to result in a 4.0% wage increase
2．The real growth rate is projected to be 1.2% in FY2023, 1.0% in FY2024, and 1.1%
　in FY2025.
　　・There is a high risk of a downturn in both domestic and foreign demand in the
　　　first half of 2024
　　・Inflation outlook

経済研究部経済調査部長

斎藤太郎（さいとうたろう）

研究領域：経済

研究・専門分野
日本経済、雇用

・ 1992年：日本生命保険相互会社
・ 1996年：ニッセイ基礎研究所へ
・ 2019年8月より現職

・ 2010年　拓殖大学非常勤講師（日本経済論）
・ 2012年～　神奈川大学非常勤講師（日本経済論）
・ 2018年～　統計委員会専門委員