Reuters reports likely downgrade of Japan's GDP growth forecast for this fiscal year

Insiders told Reuters that the Japanese government might lower the country’s economic growth forecast for the current fiscal year, which ends in March 2026. Currently, officials are expecting GDP to grow by 1.2%, but Donald Trump's tariff policies could push this figure below 1%.

The Japanese government usually publishes its economic forecast twice a year. The summer estimate is typically used as the basis for drafting the state budget for the next fiscal year.

In its latest quarterly report, published on May 1, the Bank of Japan lowered its GDP growth forecast for fiscal 2025 from 1.1% to 0.5%, citing the expected negative impact of US tariffs.

It will become clear by the end of July whether these predictions materialize. Meanwhile, Japan and the United States continue to negotiate with the aim of improving their trade relations. But so far, these efforts have not been successful. On Thursday, June 26, a Japanese delegation is going to the US for the seventh time to meet with American politicians, Reuters reports.