The government has forecast an end to deflation even after a report this week showed the economy is still struggling to shake off more than a decade of falling prices.
The gross domestic product deflator, the nation's broadest gauge of price trends, will rise 0.2 percent in the year ending in March 2014, the Cabinet Office said in a report Friday, the first increase in 16 years. The world's third-largest economy is forecast to grow a nominal 1.9 percent, exceeding a 1.7 percent expansion in real terms.
The forecast contrasts with a second-quarter GDP report, released Monday, that showed the deflator falling 1.1 percent from a year earlier. Price declines have sapped the momentum of the economy and prompted lawmakers to call for more aggressive monetary easing by the Bank of Japan.