Japan's economy is likely to grow at a faster pace in the financial year from April 2008, supported by risk domestic demand, according to an economic outlook approved by the cabinet today.
The government expects gross domestic product (GDP) to grow 2% in real terms in the year, compared to a revised estimate of 1.3% in the current year.
On a nominal basis, or before adjustments for changes in prices, Japan's GDP is projected to grow at a faster rate of 2.1% with consumer prices projected to rise for the third straight year.
But the Cabinet Office said it would closely monitor the impact on the Japanese economy of volatile financial and capital markets stemming from the sub-prime mortgage meltdown in the US and higher crude oil prices.
The government estimates that the overall consumer price index will rise by 0.3% in fiscal 2008 following a projected 0.2% increase in the current year as prices of fuel products are expected to remain high.
