Private-sector think tanks and other organizations generally predict steady growth for the Japanese economy in fiscal 2025, starting in April, with real gross domestic product growth seen surpassing that of the previous year.
The robust forecasts are primarily driven by expected wage hikes and continued price increases, as companies pass higher costs on to consumers.
In response, the Bank of Japan is likely to continue raising interest rates, with many economists projecting that the policy rate will reach between 0.75% and 1% in fiscal 2025. However, economists also highlight the uncertainty surrounding the impact of policies under the incoming administration of U.S. President Donald Trump — who is set to take office later this month — as a risk factor.
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