The government on Tuesday cut its forecast for economic growth in fiscal 2014 to 1.2 percent from 1.4 percent 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 nominal gross domestic product is predicted to grow 3.3 percent in the current fiscal year through next March, unchanged from the previous estimate in December, with the Bank of Japan's drastic monetary easing helping push prices up.
If the projections come to fruition, the rate of GDP growth would top the real, or inflation-adjusted, rate for the first time in 17 years, suggesting the economy is finally on the verge of escaping from nearly two decades of deflation.