IMF raises Japan’s growth forecast for 2026 to 0.7%

Bangkok – The International Monetary Fund on Tuesday raised its economic growth projection for Japan to 0.7% for 2026, up 0.1 percentage point from its July forecast.

The IMF’s World Economic Outlook report cited “fiscal support measures partly cushioning the impact from higher energy prices.”

Japan’s growth rate is expected to be 0.7% in 2027, unchanged from the July forecast. The report said that growth will stabilize at the same level next year “as the energy shock dissipates and monetary policy gradually normalizes.”

The IMF raised its global growth projection by 0.1 point to 3.1% for 2026, while its 2027 forecast was left unchanged at 3.4%.

“Global economic activity has proven resilient once again” because strong investment in artificial intelligence has helped mitigate the damage from geopolitics-driven disruptions, the report said.

However, the report said that “risks are skewed to the downside.” A further escalation in the Middle East will likely weigh on growth, and a reassessment of AI-related profitability and productivity prospects could sharply reduce investment, it said.