Japan's government slashed its economic growth forecast for this fiscal year largely due to slowing overseas demand, highlighting the impact of Russia's war in Ukraine, China's strict COVID-19 lockdowns and a weakening global economy.

The forecast, which serves as a basis for compiling the state budget and the government's fiscal policy, included much higher wholesale and consumer inflation estimates as surging energy and food costs and a weak yen push up prices.

The world's third-biggest economy is now expected to expand about 2.0% in price-adjusted real terms in the fiscal year ending in March 2023, according to the Cabinet Office's projections, presented at the Council on Economic and Fiscal Policy -- the government's top economic panel.

That marked a sharp downgrade from the government's previous forecast of 3.2% growth released in January. The cut largely stemmed from weaker exports, which the government expects to expand 2.5% compared to 5.5% in the previous assessment.

The government projected 1.1% growth for the following fiscal year starting April 2023.

Source: ANNnewsCH