The government on Monday cut its economic forecast for fiscal 2009 to a postwar-worst contraction of 3.3 percent from the earlier predicted zero growth as the deepening global slump continues to undermine the economy, and Finance Minister Kaoru Yosano warned that a further downgrade is possible.
The Cabinet Office said it downgraded the estimate for the current fiscal year, which began earlier this month, as the economy "has been deteriorating at an unprecedented speed," particularly since the latter half of fiscal 2008.
It's rare for the government to revise its forecast at such an early stage of the fiscal year. Usually, the Cabinet Office gives the economic forecast in terms of gross domestic product in December for the upcoming fiscal year so it can be used as the base for the year's state budget, with revisions often coming in the summer or fall to reflect the latest economic situations.