The Japanese economy will grow 2 per cent in price-adjusted real terms in the fiscal year starting from April, backed by firm domestic demand under stable prices, the government said in its annual growth projections today.
The GDP deflator, one of the broadest measures of price trends that is used to derive real GDP from nominal GDP by adjusting for price changes, is seen rising 0.1 per cent in fiscal 2008/09, which would be the first rise in more than a decade.
Underlining tepid inflation, the overall consumer price index is expected to rise 0.3 percent in fiscal 2008/09, following a 0.2 per cent gain expected in the current fiscal year, according to the projections.
The official growth forecast, drafted by the cabinet office, provides the basis for the government's budget plan as it is used to estimate tax revenues.