As of mid-January 2026, Japan's economy continues its gradual normalization after years of stagnation, exhibiting modest but resilient growth amid persistent inflationary pressures and a notably weak yen. Real GDP growth forecasts for 2026 generally range from 0.7% to 1.0% (with estimates from the IMF at 0.7%, Goldman Sachs at 0.8%, Vanguard at 1%, and others around 0.8–0.9%), supported by firm private consumption bolstered by ongoing wage gains, permanent income tax cuts, government stimulus measures, and steady corporate capital investment, even as external headwinds like U.S. tariffs have so far proven limited in impact.
