Japan said Friday its economy was on track to expand by 1.4 percent in the next fiscal year, as it discounted fears a sales tax rise would hammer growth.
The projections for the year starting April 1 would outpace a 0.7 percent expansion in fiscal 2012, but would fall short of a 2.6 percent growth forecast for the current year.
The world's number-three economy led G7 nations in the first half of last year, but slowing third-quarter growth dragged on the sizzling expansion, largely stoked by Prime Minister Shinzo Abe's bid to restore the country's faded glory.
The policy blitz, dubbed Abenomics, is aimed at dragging Japan out of 15 years of deflation with big government spending and a huge monetary easing programme unleashed by the Bank of Japan last year.
Since Abe swept to office in late 2012, the yen lost about a quarter of its value against the dollar -- giving a boost to Japanese exporters -- while Tokyo's benchmark Nikkei index soared 57 percent in 2013 to post its best performance in decades.
Critics fear that a tax rise in April -- seen as crucial for chopping Japan's massive national debt -- would curtail the budding recovery. Rates are set to increase to 8.0 percent from 5.0 percent.
On Friday, economy minister Akira Amari acknowledged the threat to consumer demand, but pointed to extra government spending designed to cushion the shock of the tax rise.
"The Japanese economy is beginning to regain strength," the minister told parliament Friday.
"Price moves are no longer in a deflationary situation. We are making steady progress towards getting out of deflation."
The government's 1.4 percent growth forecast for fiscal 2014 matches the Bank of Japan's latest growth prediction, published earlier this week.
Following a two-day policy meeting, the head of the Bank of Japan on Wednesday said its monetary easing blitz was winning the war on deflation as policymakers held off announcing any fresh measures to stimulate the economy.