TOKYO: Economists cut Japan's economic growth forecast for the second straight month, a Reuters poll showed, as a slowdown in capital expenditure and lacklustre export demand weighs on the outlook for the current fiscal year.
The economists stuck with their view that Japan's growth will slow further next fiscal year due to a planned increase in the sales tax in April.
The biggest downside risks to this scenario are a longer-than-expected downturn in consumer spending after an increase in the sales tax, the poll showed, as well as if overseas economies unexpectedly weaken.
The chance of these risks materialising is not that high, but the Bank of Japan would likely bear the burden of responding to these risks by further expanding its balance sheet, according to the poll.
"The biggest risk to growth is obviously that spending stays weaker for longer following the consumption tax hike," said Marcel Thieliant, economist at Capital Economics.
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