Japan: in 28 years of 41 the government expected more inflation than came
Japan: consumer prices by fiscal year, the government outlook and the outcome
The last 4 years the other way: fiscal 2022, 0.9% expected, 3.2% came.
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Every December–January the Japanese cabinet approves an economic outlook for the next fiscal year (April–March): growth, prices, unemployment. The budget is built on it.
By fiscal year: blue, the rise in consumer prices the government’s outlook expected for that year; orange, the outcome. The shading is the error.
- Fiscal 2022: outlook → outcome
0.9% → 3.2%
- Fiscal 2023: outlook → outcome
1.7% → 3.0%
- Fiscal 2024: outlook → outcome
2.5% → 3.0%
- Fiscal 2025: outlook → outcome
2.0% → 2.6%
- Fiscal 1982: outlook → outcome
4.7% → 2.6%
- Fiscal 1986: outlook → outcome
1.9% → 0.0%
- Fiscal 1981: outlook → outcome
5.5% → 4.0%
One outlook per fiscal year: the last before it begins; consumer prices, all items, % on the previous fiscal year. Outcome: Statistics Bureau of Japan (2025 base). Years with a price outlook: 41 (not all before 1998). Sign test: p = 0.017.
The miss changed sign: from the 1980s and through the deflation years prices more often rose slower than the government expected; since 2022 faster. The government’s price outlook usually sits nearer the target than the latest outcome.
A question for this picture
If a price outlook sits above the outcome for decades and then suddenly below it, what changed: the economy or the outlook?