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Much less fiscal policy support will likely constrain domestic demand and higher-for-longer interest rates will make monetary policy even more restrictive.
Macroeconomic forecasts as of 1 September 2023
Japan’s Q2 GDP significantly outperformed expectations, soaring to a 6% SAAR* from 3.7% in Q1. This robust performance was primarily driven by a surge in exports, while domestic demand indicators, such as private consumption and imports, contracted. We have revised our 2023 growth forecast up from 1% to 2%, to reflect the Q2 surprise.
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