IMF cuts Japan's growth forecast to 1.0% in 2019 on sluggish exports

WASHINGTON (Kyodo) --The International Monetary Fund forecast Tuesday that Japan's economy will grow 1.0 percent in 2019, down 0.1 percentage point from its estimate in January, due partly to sluggish exports amid a slowdown in the global economy.

Global growth is forecast at 3.3 percent for this year, down 0.2 point from the previous projection, amid a lingering trade war between the United States and China and uncertainty surrounding the United Kingdom's exit from the European Union, the IMF said in its latest World Economic Outlook.

Growth in the United States and the eurozone is estimated at 2.3 percent and 1.3 percent in 2019, respectively, 0.2 point and 0.3 point lower than earlier expectations, according to the IMF report.

The Chinese economy, however, is likely to grow 6.3 percent this year, up 0.1 point from its January estimate, the Washington-based institution said.

Despite the downgrade for 2019, the IMF left unchanged at 0.5 percent its outlook for Japan's growth for next year, citing the effect of the additional fiscal support that the government plans in an effort to mitigate the negative impact of the planned consumption tax hike to 10 percent from 8 percent in October.

"In Japan, sustained monetary accommodation will be necessary to lift inflation expectations and progress toward the central bank's target" of 2 percent, the report said.

The IMF maintained its forecast for global growth in 2020 at 3.6 but noted that "the possibility of further downward revisions is high, and the balance of risks remains skewed to the downside," citing risks such as trade tensions, financial vulnerabilities and political uncertainty.

"Avoiding policy missteps that could harm economic activity should be the main priority," it said.

Growth in trade of goods and services across the world is projected at 3.4 percent and 3.9 percent for this year and next, down 0.6 point and 0.1 point from the previous estimates.

Source: https://mainichi.jp/english/articles/20190410/p2g/00m/0bu/005000c