JAPAN’S government slightly lowered its growth forecast for the current fiscal year due to sluggish exports and a drop in demand after the April sales-tax hike, but the forecasts were largely in line with the Bank of Japan’s (BOJ) projections.

    Members of the government’s top advisory panel did not object to the BOJ’s view that consumer prices will continue to rise under its quantitative easing program, showing there is little difference between the government’s and the BOJ’s assessment of the economy.

    The convergence of views suggests the BOJ is unlikely to face pressure from the government to ease monetary policy further as the government turns its attention to compiling next fiscal year’s budget.

    “Private sector members agreed that consumer prices can continue to rise as the output gap moves into positive territory,” Economics Minister Akira Amari told reporters after a meeting of the Council on Economic and Fiscal Policy (CEFP), the government’s top advisory panel.

    The government now sees real gross domestic product growth at 1.2 percent in fiscal 2014/15, versus 1.4 percent forecast earlier this year. Growth is expected to accelerate to 1.4 percent in the following year, according to Japan’s Cabinet Office estimates.

    The estimates are broadly in line with projections made by the BOJ, which last week cut its economic growth forecast for the current fiscal year to 1 percent. The BOJ expects growth to pick up to 1.5 percent the following fiscal year.

    “I think the biggest factor was the decline in external demand due to a delay in emerging market recovery and less-than-expected export growth,” Finance Minister Taro Aso told reporters.

    “I still expect that the exports will grow in accordance with a moderate recovery [in the global economy].”(SD-Agencies)