About this work
The May 2025 Japan outlook forecasts growth of 1.2 percent in 2025 and 0.7 percent in 2026, with a temporary contraction as trade frictions meet softer consumption. Services and employment offer some resilience despite manufacturing weakness. Firm wages support gradual monetary normalization, while limited fiscal room constrains the response to slower activity.
Cite this work
Jonathan Fortun (2025). Asia Economic Views: Japan Outlook: Between Tariffs and Tightening. Institute of International Finance.