OECD lowers Japan’s GDP forecast to 0.5% in ’24

The Organisation for Economic Cooperation and Development (OECD) projected Japan’s GDP to grow by 0.5 per cent in 2024 and 1.1 per cent in 2025, according to its latest Economic Outlook report published on Thursday.

Earlier in its Interim Economic Outlook issued in February, the OECD forecasted Japan’s GDP to expand by 1.0 per cent in both 2024 and 2025. This downward revision reflects a shift in focus towards domestic factors driving Japan’s growth.

“Following robust growth in the first half of 2023, real GDP contracted by 0.8 per cent in the third quarter and grew by 0.1 per cent in the fourth quarter as high inflation weighed on private consumption.” OECD’s May report read.

“However, high-frequency indicators of consumption showed signs of improvement in early 2024, reflecting inflation and wage developments and rising expectations. Headline consumer price inflation has moderated with decreasing energy prices and slowing food price inflation but remains above target at 2.7 per cent in March.”