Japan: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Japan
you are currently viewing:Japan: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for JapanApril 03, 2026--The Japanese economy has displayed impressive resilience in the face of global shocks and output is growing above potential. Domestic demand has been robust and unemployment remains low. After three decades of near-zero inflation, prices grew faster than the BOJ's target for over three and a half years before moderating in January. While nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power. Growth is projected to remain strong in 2026, but to moderate to 0.8 percent due to weaker external demand and the impact from the conflict in the Middle East. Private investment and consumption are expected to remain strong, the latter supported by a gradual rise in real wages as inflation eases and labor shortages persist. From 1.3 percent y/y in February, inflation is expected to rise in 2026 before converging to the BOJ's target in 2027. Risks to the outlook and inflation are broadly balanced. Source: imf.org |
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