Goldman Sachs - 2023 Outlook: Focus on Wage Growth and BOJ Leadership Change

While we expect Japan’s real GDP growth to slow to 1.3% in 2023, from 1.5% in 2022, we look for growth to continue to outpace its potential. Consumption is likely to directly benefit from economic reopening, and we also expect capex to remain firm on the back of pent-up demand, labor shortages due both to demographics and reopening, and supply chain rebuilding. We see a contrast in external demand between goods and services, with goods exports softening predominantly in H1, on global economic slowdown, and services exports improving steadily throughout the year led by inbound spending.