Research Briefing | Nov 21, 2022

Why we forecast Japan’s resilient growth in 2023

Japan: Why we forecast resilient growth in 2023

We expect the Japanese economy to grow at 0.9% y/y in 2023, after 1.6% growth in 2022. Four reasons why we project the relatively resilient growth compared to other advanced economies: pent-up demand, the key auto industry recovery, supportive policy, and a strong base effect.

What you will learn:

  • Firstly, economic reopening has lagged behind the US and Europe, implying that some of the emerging pent-up demand will carry over to early 2023. 
  • Secondly, Japan’s key auto industry looks poised for recovery, as supply chain disruptions finally subside. Easing supply constraints will encourage auto makers to enhance production to fulfil existing backlogs.
  • Thirdly, both monetary and fiscal policy will remain supportive. We expect interest rates and financial conditions to stay extremely accommodative.
  • Lastly, and technically, the strong base effect from a robust recovery in H2 2022 is also contributing to push up average GDP growth for 2023, which appears superficially stronger than q/q growth momentum.
Back to Resource Hub

Related Resouces

BoJ preview: What to expect for a QE exit plan

Post

Japan’s BoJ preview: What to expect for a QE exit plan

At the July policy meeting, the Bank of Japan (BoJ) will reveal its plan for reducing JGB purchases over the next one to two years. We project that the BoJ will reduce monthly JGB purchases by ¥0.5trn every quarter, from the current ¥6trn, to impress a "sizeable reduction" on the market, while avoiding a sharp rise in yields by stressing flexibility and predictability.

Find Out More
The Nikkei: The impact of a second trump presidency and high policy interest rate on the Global Economy

Post

The Nikkei: The impact of a second trump presidency and high policy interest rate on the Global Economy

Adrian Cooper, CEO and Chief Economist of Oxford Economics talked about the impact of a second trump presidency and high policy interest rate on the Global Economy in the interview with the Nikkei (the world's largest financial newspaper).

Find Out More
BoJ-will-start-reducing-JGB-purchases-in-August

Post

Japan’s BoJ will start reducing JGB purchases in August
Find Out More