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Japan's government releases its economic growth forecasts -
which serve as a basis for compiling the state budget - in
January and then revises them sometime around July.
In revised estimates due next week, the forecast is likely to be
cut to about 1.0%, with rising living costs seen weighing on
consumption for longer than initially expected, the sources
said, asking not to be named because they were not authorized to
speak to the media.
The new estimate, however, would still be higher than
private-sector forecasts, reflecting government hopes that
broadening wage hikes and an extension of fuel subsidies will
boost consumer spending.
A survey by the Japan Center for Economic Research, a
think-tank, released on Tuesday showed economists expect gross
domestic product growth of 0.44% this fiscal year.
The Bank of Japan is also likely to trim this fiscal year's
growth forecast in July, reflecting a rare unscheduled downgrade
to historical GDP figures, sources have told Reuters. The
central bank currently projects growth of 0.8% in the current
fiscal year.
(Reporting by Yoshifumi Takemoto; Writing by Leika Kihara;
Editing by Helen Popper)
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