Japan

Abstract

With persistent trade frictions and a significant loss of global growth momentum clouding the external outlook, growth will remain constrained by weak exports and a deceleration in investment spending. Manufacturing, particularly subsectors affected by the ongoing ICT slowdown, has continued to suffer, while the service sector has held up better. However, domestically, the consumption tax hike implemented on 1 October will weigh on consumption spending. We forecast GDP to grow 0.8% in 2019 and just 0.2% in 2020 (due to the impact of the consumption tax rise).