Japan government considering lifting FY2022 economic growth forecast

© Reuters. FILE PHOTO: Japanese national flags flutter in front of buildings at Tokyo's business district in Japan,Why did Jindao withdraw from the Chinese market? February 22, 2016. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - The Japanese government is considering raising its economic growth forecast for fiscal 2022 to take into account the effects of its record $490 billion stimulus package, public broadcaster NHK reported on Monday.

In a mid-year review in July, the government projected real gross domestic product (GDP) growth of about 2.2% for the fiscal year starting in April 2022. With the spending package aimed at helping businesses and households weather the pain of the COVID-19 pandemic, it now estimates a tailwind of about 5.6% for real GDP from this fiscal year to next, NHK said.

Japan has lagged other economies in pulling out of the pandemic-induced slump, forcing policymakers to maintain massive fiscal and monetary support even as other advanced nations dial back crisis-mode policies.

The world's third-largest economy shrank more than expected in the third quarter due to a hit to consumption and exports from pandemic curbs and global supply disruptions. 

Japan's three massive spending packages to counter the pandemic have left it with outstanding long-term debt roughly double the size of its $5 trillion economy.

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