第一ライフ資産運用経済研究所 released its revised Japan economic outlook, raising its real growth forecasts to 0.9% for FY2026 and 1.2% for FY2027. The new outlook reflects revisions following the preliminary GDP figures for April-June 2026.
The real GDP growth outlook has been revised upward to 0.9% for FY2026 and 1.2% for FY2027. On a calendar-year basis, growth is projected at 0.9% in 2026 and 1.0% in 2027. Growth in the April-June quarter of FY2026 exceeded the previous forecast, while declining risks of difficulties in procuring raw materials and components and growing demand related to AI are expected to boost economic activity.
The FY2027 growth outlook newly incorporates a 1% cut in the consumption tax on food products from April and annual household benefit payments of ¥600 billion. This is expected to increase household purchasing power and boost real growth in FY2027 by slightly more than 0.2 percentage points, while making a negative contribution to the all-items consumer price index.
In the second half of FY2026, rising import prices and costs due to the situation in the Middle East will exert upward pressure, but avoiding supply constraints and growing demand related to AI are expected to support the economic recovery. On the investment front, demand for labor-saving, digital and AI-related investments remains firm, and capital investment is expected to continue recovering.
Monetary policy assumes that the next rate hike will take place in September 2026, and the possibility of additional rate hikes by the Bank of Japan is considered to be increasing. The outlook calls for further rate hikes in January and June, lifting the policy rate to 1.75%. Depending on the persistence of yen depreciation and developments in inflation risks, further rate hikes may also be considered.