Japan's government on Tuesday cut its forecast for economic growth in fiscal 2014 to 1.2% from 1.4% in real terms amid lingering fears that the April 1 consumption tax hike, the first in 17 years, may continue to weigh on domestic demand.
But the Cabinet Office said the nation's nominal gross domestic product is predicted to grow 3.3% in the current fiscal year through March 2015, unchanged from the previous estimate last December, with the Bank of Japan's drastic monetary easing helping push up prices, according to (Kyodo) news agency.
If the projections are realized, the rate of GDP growth would top the real, or inflation-adjusted, rate for the first time in 17 years, suggesting the world's third-largest economy is on the verge of escaping from nearly two decades of deflation.