Jiji Press WASHINGTON (Jiji Press) — The World Bank upgraded its projection for Japan’s real growth in 2017 to 0.9 percent on Tuesday, from 0.5 percent estimated as of June 2016, while cutting the global growth forecast by 0.1 percentage points to 2.7 percent.
The upgrade for Japan reflected anticipated effects of a consumption tax hike postponement and a new fiscal stimulus package, according to the World Bank’s latest Global Economic Prospects report.
The bank, at the same time, mentioned the possibility of Japan’s economic growth being constrained by a shrinking and aging labor force and policy uncertainty in the United States under the administration of incoming President Donald Trump and in major European countries where elections will be held this year.
On the global growth prospect cut, the bank also pointed to difficulties in predicting economic and fiscal policies of the Trump administration, set to be launched on Jan. 20, and policies after the elections in Europe.
The U.S. growth projection for 2017 was held steady at 2.2 percent. But the growth rate, in terms of price-adjusted gross domestic product, could be higher at 2.5 percent if the Trump administration implements tax breaks as he pledged during his election campaign, according to the report. Meanwhile, its possible protectionist approach was cited as a negative factor for economic growth.
“Because of the outsize role the United States plays in the world economy, changes in policy direction may have global ripple effects,” World Bank Development Economics Prospects Director Ayhan Kose said in a press release.Speech