Can you trust? Government Economic Outlook February 6 18:25

One month has passed in the new year, but at the beginning of the year many people may have forgotten their fortune and wondered what kind of year they will be. Fortunes are likely to be related to how the economy will move in the past year, but do you know what the future economy will be like, and the government will give a concrete outlook on economic growth? ? And sometimes, this outlook is skeptical, but how much is it true? I looked it up. (Keita Kage, Ministry of Economic Affairs)

1.4% confident

Minister for Economic Revitalization Nishimura "I am confident that this is a viable figure."

In mid-December last year, Minister Nishimura's Minister for Economic Revitalization announced the economic outlook for the new fiscal year and 2020. The economic growth rate indicated there was "1.4%" in real terms excluding price fluctuations.

In this context, the government forecasts that the economy in the new fiscal year will continue to grow positively, saying that as the employment and income environment continues to improve and the virtuous cycle of the economy is progressing, the economy is expected to recover, centered on domestic demand. Was shown.

But when I saw this growth rate, I was honestly surprised. That's because the average forecast for economic growth for the new year, as shown by more than 30 private economists, was actually 0.49% (as of the December survey), well above that figure.

Mr Nishimura was not optimistic about the big difference from private forecasts at a press conference, saying that he expects the effects of the new economic measures that the government has decided to implement will be steadily appearing Was emphasized.

However, private forecasts remained at "0.51%" in real terms in a January survey, and the gap with the government outlook has remained wide open.

Is the government's economic outlook "right"?

This outlook has been prepared by the Cabinet Office, which is home to “government economists” responsible for economic analysis within the government. In this case, the project cost was calculated for each business implemented in the economic measures, and the effect of each item, such as personal consumption and capital investment, was elaborated on how much the growth rate would be increased, resulting in a figure of 1.4%. And

So how accurate is this outlook? I examined it for 10 years until 2018 when the actual value of GDP for one year was announced. We will verify the accuracy by comparing the actual growth rate forecast value for the next fiscal year (at the time of the Cabinet decision) indicated in the government economic outlook with the actual GDP growth rate (at the time of the second preliminary report for each fiscal year).

As a result, in two decades, the actual GDP has exceeded the government outlook twice. In the remaining eight times, the actual GDP growth rate was lower than the government's forecast.

Eight out of ten times may be said to be "out of sight."

Of these, the actual GDP was lower than the government's outlook in FY2014. The government's outlook was 1.4% in real terms, but actual GDP was -0.9%, down 2.3 points.

This year, the consumption tax rate was raised to 8% in April, indicating that the impact of the tax increase was longer and longer than expected by the government.

On the other hand, if the two times exceeded, the forecast for 2017 is 1.6% compared to the 1.5% forecast, which is almost “hit”. In FY2010, the result was 2.3% against the forecast of 1.4%. This suggests that the economic recovery after the Lehman Shock has progressed more than the government expected.

Is it a prediction? Or is it a goal?

Furthermore, when the private think tank Nissay Basic Research Institute examined the results of 39 years up to FY2018, the error between the actual GDP growth rate and the government's forecast (actual value-forecast value) was -0.66% on average. Was.

In the past 39 years, 24 (62%) overestimated government outlooks, while 14 (36%) underestimated government outlooks.

Taro Saito, who conducted the survey, said the head of the Economic Research Department as follows.

Taro Saito, Director of Economic Research, “The actual GDP tends to be clearly lower than the government outlook. The government outlook is often overestimated, but this is not because of the simple economic Is it because the meaning of "goal" is strong "

What happens with the forecast downside

However, we cannot dismiss this downturn in the government outlook as merely an "always inconsistent expectation." Because of this outlook, the government estimates tax revenues such as corporate and income taxes for the year.

Expenditures, which are expenditures, are determined based on the revenues, and the overall budget of the country is completed. In other words, if the underlying growth rate outlook is down, there is a high possibility that the expected tax revenue will also fall, but the expenditures will be carried out as planned-so the lack of new debt Could be covered by new issuance of government bonds.

If you compare it to a family, you have to buy a new car with the unfounded confidence that `` this should increase your salary '', but you can not raise the salary, you have to increase the additional borrowing, Is that the situation?

At home, the marriage can be confusing between the couple, "Who said the salary would go up?" This year's forecast was initially 1.3% growth, but was revised down to 0.9% in July.

As a result, tax revenues fell below initial forecasts, and the government will issue additional deficit-generating government bonds of over ¥ 2.2 trillion in the supplementary budget for this fiscal year.

The economic focus of this is

Nishimura, Minister for Economic Revitalization, said that the actual GDP is often lower than the government's outlook, because "the economy is a living thing, and it is not a story that can be completed by itself due to the influence of overseas economies." .

Economic risks will continue to pile up, and looking overseas, the future of trade friction between the United States and China, the situation in the Middle East, the effects of Brexit, etc.

Looking at the domestic market, trends in personal consumption after the consumption tax hike, trends in consumption and investment after the Tokyo Olympics and Paralympics, and the spread of the new coronavirus infection came here.

The government's economic growth rate for the new year is 1.4% in real terms. It is likely to be a year of questioning whether the Japanese economy is capable of overcoming risks and realizing this outlook.

Economic Department Reporter
Keita Kage joined in 2005, worked at the Yamagata Bureau Sendai Bureau and is currently in charge of the Cabinet Office