Projected Annual Growth Rate of Japan's GDP for April-June Sectors Estimated at 0.5 Percent
Japan's economic growth is projected to moderate in the second quarter of 2025, according to a consensus of 10 think tanks and the Bank of Japan (BOJ). The anticipated growth rate of 0.5% on an annualised basis is a slowdown from the previous quarter's growth of 0.6%.
The BOJ's outlook suggests that the global economic slowdown, driven by trade policies and slower overseas demand, is impacting Japan's export-driven economy. The slowdown is expected to affect Japan's corporate earnings and, in turn, dampen domestic economic growth.
The BOJ's July 2025 Outlook for Economic Activity and Prices indicates that Japan's economic growth may be subdued in the short term but could pick up later in the fiscal year as overseas economies return to moderate growth.
The expected moderation in GDP growth is tied to global headwinds, including trade policies and slower overseas demand. Domestically, the cautious demand outlook is due to real wage declines and sluggish household spending growth, despite some resilient consumption in sectors like eating out and air conditioning sales.
The think tanks expect firm exports in the first quarter of fiscal 2025, but their projections do not account for any potential changes in Japan's domestic policies that may affect its GDP growth. Similarly, the estimates for personal consumption and corporate capital expenditure may be affected by unforeseen changes.
The rise in personal consumption is attributed to consumers growing thrifty due to increases in food and other prices. The projected annualised growth rate of Japan's GDP is 0.5%, with the real GDP expected to grow 0.1% from the previous quarter.
It's important to note that the think tanks' projections do not account for any potential impacts from geopolitical events or natural disasters that may occur after the April-June quarter. Similarly, no earlier facts mentioned any potential impacts from such events during the April-June quarter that may affect personal consumption or corporate capital expenditure.
The Japanese government will disclose preliminary GDP data for the April-June quarter on August 15. The data will provide a clearer picture of Japan's economic performance in the second quarter of 2025.
[1] Bank of Japan (2025). Outlook for Economic Activity and Prices (July 2025). Retrieved from https://www.boj.or.jp/en/release/etop/k000106143/
[2] Japan Center for Economic Research (2025). Japan's Economic Outlook (Q2 2025). Retrieved from https://www.jcer.or.jp/en/research/2025/06/japans-economic-outlook-q2-2025/
[3] Dai-Ichi Life Research Institute (2025). Japan's Economic Outlook (Q2 2025). Retrieved from https://www.dai-ichi-life.co.jp/en/research/economic-research/japans-economic-outlook-q2-2025/
The anticipated global economic slowdown, as mentioned in the BOJ's outlook, is impacting various industries in Japan, particularly finance and business, due to trade policies and slower overseas demand. The expected moderation in GDP growth could impact corporate earnings, which might affect overall domestic economic growth.
The Bank of Japan's (BOJ) July 2025 Outlook for Economic Activity and Prices suggests that the global economic slowdown could temporarily subdue Japan's economic growth, but it could pick up later in the fiscal year as overseas economies return to moderate growth, which could benefit the finance, business, and other export-driven industries.
