Japan Economic Update

Crédit Agricole CIB forecasts that Japan will exit structural deflation through high-pressure economic policy, with real GDP growth projected to reach 1.4% by 2028. This recovery is contingent on sustained proactive fiscal policy and avoiding premature monetary tightening.

Key Takeaways

• 1.Japan is expected to move toward overcoming structural economic stagnation through a high-pressure economic policy, supported by proactive fiscal and accommodative monetary measures.
• 2.Real GDP growth is forecast at 0.3% in 2026, rising to 0.5% in 2027 and 1.4% by 2028.
• 3.Core CPI (ex-fresh food and energy) is projected to slow temporarily due to VAT cuts and weak demand, before expanding toward 2% by 2028.

Table of Contents

• Japan economic update: key economic calls; a move to completely escape from structural deflationary stagnation through high-pressure economic policy
• Growth (2026: 0.3%, 2027: 0.5%, 2028: 1.4%): move towards overcoming structural economic stagnation after a short-term stagnation
• Inflation (2026: 2.0%, 2027: 0.6%, 2028: 1.7%): ex-energy would temporarily slow down
• Japan economics forecast table
• Macro Research advanced tools

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