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The government projection compared with a
forecast of 1.4 percent growth issued in July, and is in line
with the Bank of Japan's growth estimate published in October.
The government's forecast provides the basis for its economic
policies, including its annual budget plan for the next fiscal
year, which will be decided on Jan. 14.
Government officials with knowledge of the matter said the
economy probably suffered its first contraction in five years
this fiscal year, hit hard by a sales tax hike in April.
The economy is expected to recover in the next fiscal year,
helped by falling oil prices, added the officials, who asked not
be named as they were not authorized to speak to the media.
The government is also set to forecast nominal growth of 2.7
percent in the next fiscal year, which will help its tax
revenues hit a 24-year high of 54.5 trillion yen ($457.45
billion), the sources said.
($1=119.1400 yen)
(Reporting by Yuko Yoshikawa and Takashi Umekawa; Writing by
Tetsushi Kajimoto; Editing by Clarence Fernandez)
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