In the October 2012 issue of the Outlook Report, the Bank’s median projection for Japan’s annual real GDP growth rate is 1.5 percent for fiscal 2012, 1.6 percent for fiscal 2013, and 0.6 percent for fiscal 2014. This projection takes into account the front-loaded increase in demand prior to the consumption tax hike and the subsequent decline.
Excluding these effects, the projected growth rates for fiscal 2013 and 2014 would be around 1–1.5 percent. This outlook entails a number of uncertainties and there are both upside and downside risks. Under the current circumstances, however, we should be particularly mindful of the downside risks.