TOKYO: Prime Minister Shinzo Abe's government has decided to raise Japan's real GDP growth forecast to 1.3 percent for the fiscal year starting March 2014 from the 1.0 percent forecast previously, an official with knowledge of the process told Reuters on Saturday.
The government's growth forecast underpins its expectation for tax revenue and is part of the annual budget review.
The government projects about 50 trillion yen ($484.8 billion) in tax revenue for the coming fiscal year based on the revised growth forecast, the official told Reuters.
The increase in the sales tax next year is expected to curb consumption, but the government upgraded its growth forecast based on an expected return from fiscal stimulus aimed at countering the tax hike.
The national sales tax is set to rise to 8 percent in April and could rise to 10 percent in 2015 if the Abe administration presses ahead with its fiscal consolidation plan.
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