BMI View: Japan's growth boom could continue into H217, and indeed into 2018. However, we expect thecountry's deteriorating economic fundamentals and a recovery in oil prices to undermine growth over themedium term, and are forecasting just 0.5% real GDP growth in 2018. This is likely to impact on food anddrink sales in Japan during our forecast period despite the country possessing one of the most advancedfood and drink markets globally. However, Japanese consumers continue to offer high per capita food anddrink spending levels presenting potentially lucrative opportunities.
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We have revised up our forecast for Japan's 2017 real GDP growth to 1.8% from 1.3% previously, whichwould mark the fastest pace of growth since 2013. According to data from the Cabinet Office, theincrease in Japan's headline growth in Q217 was due to strong domestic demand, with privateconsumption, non-residential, and residential investment all accelerating.