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Japan gov't cuts 2016 economic growth outlook

Xinhua, July 13, 2016 Adjust font size:

The Japanese government cut down its domestic economic growth outlook for fiscal year 2016 on Wednesday, as the economy failed to pick up as expected after the government postponed the consumption tax hike for the second time.

The government has downgraded the expected economic growth in real terms for fiscal 2016 from the 1.7 percent predicted in January to 0.9 percent, and from 3.1 percent to 2.2 percent in nominal terms, according to a document of the Cabinet Office.

The forecast excludes the effects of possible stimulus measures taken by the government this month, said the Cabinet Office.

The projection came after Prime Minister Shinzo Abe decided to further postpone the sales tax hike from April 2017 to October 2019.

The Japanese government raised the sales tax from 5 percent to 8 percent from April 1, 2014, in an effort to increase government revenue, and planned to further raise the sales tax to 10 percent from October 2015.

But as private consumption in Japan slacked and Japanese economy fell into technical recession in the later half of 2014, the planned sales tax hike was postponed to April 2017, and then for a second time to October 2019. Endit