The government has slashed its economic growth forecast for this fiscal year largely due to slowing overseas demand, highlighting the impact of Russia's war in Ukraine, China's strict COVID-19 lockdowns and a weakening global economy.
The forecast, which serves as a basis for compiling the state budget and the government's fiscal policy, included much higher wholesale and consumer inflation estimates as surging energy and food costs and a weak yen push up prices.
The world's third-biggest economy is now expected to expand about 2.0% in price-adjusted real terms in the fiscal year ending in March 2023, according to the Cabinet Office's projections, which were presented at the Council on Economic and Fiscal Policy — the government's top economic panel.