The Japanese government is likely to cut its estimate for the country's economic growth in the next fiscal year amid weaker production and exports, sources close to the matter said Thursday. The Cabinet Office is nearing a decision on revising downward its projected rise in fiscal 2011 real gross domestic product to around 1.4 percent from 2.0 percent forecast in June. On prices, the government could forecast a zero to 0.4 percent rise in the nationwide consumer price index, the sources said, adding that with such an estimate, Japan would renew its resolve to beat deflation during the fiscal year starting April. It would be the first rise in the index in three years. The downward revision to GDP growth would be largely due to recent declines in industrial output resulting from the diminishing effects of the government's fiscal stimulus, while slower exports amid a slowdown in overseas economies have also had a negative impact, they said. The government will calculate projected tax revenues in fiscal 2011 using the economic outlook report. It will finalize the report before the Cabinet of Prime Minister Naoto Kan approves a draft fiscal 2011 budget as early as Dec. 24. In October, the Bank of Japan projected that the country's economy would expand a real 1.8 percent in fiscal 2011 from the previous year, while saying the core CPI, which excludes fresh food prices, would rise 0.1 percent in the year through March 2012.

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