According to Jinshi, as the dust settles on the Japanese general election, HSBC economists Jun Takazawa and Frederic Neumann remain constructive on the Japanese economy and expect Japan's economic growth to be above potential in 2025 and 2026.
As the cost of living rises, supporting the real economy is front and center in candidatesâ discussions, which could lay the groundwork for additional cyclical support measures.
Many variables are still in flux, especially the actual implementation of policies, which may differ from what was said during the campaign. The previous government's long-term structural economic policies are likely to continue. Additional stimulus measures may boost spending and support the Bank of Japan's idea of ââgradually raising interest rates.
