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Japan’s Economic Outlook for Fiscal Years 2025-2026 (August 2025)

2025年08月25日

（斎藤 太郎） 日本経済

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■Summary
 
<Real GDP Growth Rate: Forecast at 0.6% for FY 2025, 0.9% for FY 2026>
 
  1. Real GDP in the April–June quarter of 2025 grew by 0.3% from the previous quarter (1.0% on an annualized basis), marking the fifth consecutive quarter of positive growth. While domestic demand decreased by 0.1% from the previous quarter, exports increased by 2.0% despite the Trump tariffs. This resulted in external demand contributing 0.3% on a quarter-to-quarter basis, offsetting the sluggishness in domestic demand.
     
  2. The impact of tariff hikes will become apparent in the July–September quarter, leading to a decline in exports. In addition, private residential investment is expected to sharply decline due to a reactionary decline following last-minute demand ahead of the amendments to the Energy Conservation Act for Buildings and the Building Standards Act. Consequently, real GDP is projected to contract by 1.3% on an annualized basis from the previous quarter, marking the first negative growth in six quarters. In the October–December quarter, real GDP is expected to return to modest positive growth at 0.3% on an annualized basis from the previous quarter as the pace of export decline moderates. However, the risk of continued negative growth will increase if tariffs are further raised.
     
  3. The real GDP growth rate is projected at 0.6% for FY 2025 and 0.9% for FY 2026. After entering 2026, the negative impact of tariff hikes will gradually fade, exports will recover, and domestic demand will increase, led by private consumption and capital investment. As a result, growth of around 1% on an annualized basis is expected to continue, slightly above the potential growth rate.
     
  4. The consumer price inflation rate (excluding fresh food) is forecast at 2.7% for FY 2025 and 1.6% for FY 2026. While strong wage increases are expected to accelerate the pace of service price hikes, the appreciation of the yen and lower crude oil prices will lead to a decline in import prices, thus slowing the pace of goods price inflation. Consequently, after entering 2026, the inflation rate is projected to fall below the Bank of Japan’s 2% price stability target.

 
■Index

1．Positive Growth of 1.0% on an Annualized Basis in the April–June Quarter of 2025
　　(US-Bound Export Volumes Remain Flat Even After Tariff Hikes)
　　(Impact of Tariff Hikes Expected to Materialize Going Forward)
　　(Spring 2026 Wage Negotiations Expected to Show a Slower Pace of Wage Increases)
2．Real Growth Rate Forecast: 0.6% for FY 2025, 0.9% for FY 2026
　　(Negative Growth in the July–September Quarter of 2025)
　　(Outlook for Prices)

【次ページ】Positive Growth of 1.0% on an Annualized Basis in the April–June Quarter of 2025

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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

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経歴 ＋ －

・ 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

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