Japan's economy is expected to expand 1.5 percent for fiscal year 2015 starting from April, buoyed by private-sector demand, the government said Monday.
Economic projections, which will be used to estimate tax revenue as the basis for the budget next fiscal year, were approved at a Cabinet meeting.
In nominal terms, the world's third-biggest economy's gross domestic product (GDP) will likely grow 2.7 percent for the coming fiscal year, according to the government.
"The economy will continue on a moderate recovery track on the back of improvement in private-sector demand," Economic and Fiscal Policy Minister Akira Amari told reporters.
For fiscal 2014, the government expects GDP will shrink 0.5 percent, due to the consumption tax hike last April to eight percent from five percent and a weaker yen. It will mark the first decline since fiscal 2009, due to a global slowdown triggered by the collapse of US investment bank Lehman Brothers. The government predicts the economy will grow 1.7 percent in nominal terms in the current fiscal year.
The Cabinet is expected to endorse a record JPY 96.3 trillion (USD 804 billion) budget for the next fiscal year on Wednesday.