More than 70 percent of major Japanese companies expect the domestic economy to grow in 2024, believing solid consumer and capital spending are set to overcome the impact of inflation, a Kyodo News survey showed Tuesday, underlining more optimistic corporate sentiment than a year earlier.
In the survey of 113 companies, including Toyota Motor Corp. and SoftBank Group Corp., 72 percent said they expect moderate growth and 1 percent see solid expansion in 2024.
The combined 73 percent is higher than a year before when 56 percent said they expected moderate or solid growth even as soaring raw material and energy prices presented as significant risk factors.
The upbeat view coincides with the Organization for Economic Cooperation and Development’s growth projection for Japan of 1.0 percent in 2024, a slower pace than 1.7 percent estimated for 2023.
In a multiple-choice questionnaire asking why the companies expect growth, 85 percent of respondents predicting economic expansion cited a recovery in private consumption and 65 percent pointed to spending by the increasing number of foreign visitors.
Some 62 percent said capital spending should pick up. In the semiconductor sector, for example, Taiwan Semiconductor Manufacturing Co. is building an $8.6 billion plant in Kumamoto Prefecture and Rapidus Corp. plans to construct a cutting-edge chip plant in Hokkaido.
Meanwhile, 22 percent expect zero growth while 3 percent said Japan’s economy will contract moderately, with 54 percent concerned about a contraction in consumer spending. Slowing overseas economies and geopolitical risks such as the Israel-Hamas war were also raised, among other concerns.
No company stated that it expects a recession in 2024.
Prime Minister Fumio Kishida has repeatedly called on corporations to deliver wage hikes above price increases to combat inflation. Source: Kyodo news
