Japan govt to cut inflation forecasts, gloomier on outlook than BOJ

By: | Published: July 12, 2016 4:08 PM

Japan's government is expected to cut its consumer inflation forecast for the current fiscal year and produce an estimate for fiscal 2017 that is much lower than the central bank's 2 percent target, government sources told Reuters on Tuesday.

The government projects consumer inflation of 1.4 percent for fiscal 2017, the sources said, well below the 2 percent target the Bank of Japan says will be met during that year. (Reuters)The government projects consumer inflation of 1.4 percent for fiscal 2017, the sources said, well below the 2 percent target the Bank of Japan says will be met during that year. (Reuters)

Japan’s government is expected to cut its consumer inflation forecast for the current fiscal year and produce an estimate for fiscal 2017 that is much lower than the central bank’s 2 percent target, government sources told Reuters on Tuesday.

In draft forecasts to be finalised on Wednesday, the government projects consumer inflation of 0.4 percent for the current fiscal year ending in March 2017, down from 1.2 percent projected in January, the sources said.

The government projects consumer inflation of 1.4 percent for fiscal 2017, the sources said, well below the 2 percent target the Bank of Japan says will be met during that year.

The government usually produces economic and price estimates in January, which serve as a basis for compiling the state budget, and revises them around mid-year.

The draft estimates will be finalised at a cabinet meeting on Wednesday.

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