Tokyo — Japan on Monday unveiled its growth forecast for the fiscal year starting in April, saying the economy was on track to expand 2.5 percent, thanks to fresh stimulus and a recovery in key overseas markets.

 

Prime Minister Shinzo Abe's cabinet approved the forecast—higher than an estimate of one-percent growth for the current fiscal year to March—on Monday morning, government officials said.

 

The forecast is slightly higher than estimates from economists who have also upped their forecasts on the back of a weaker yen, which helps exporters, and new government stimulus measures, Dow Jones Newswires reported.

 

Japan is also counting on a recovery in key markets overseas, including the United States and Europe, to fuel an expansion in the world's third-largest economy.

 

Last week, the Bank of Japan raised its growth forecast for the same fiscal year to 2.3 percent from a previous 1.6 percent estimate, as it announced an open-ended asset buying program and new inflation target aimed at dragging Japan out of the deflation that has dogged its economy for years.

 

Abe, who took office late December after a landslide national election victory, unveiled a ¥20.2 trillion ($222 billion) stimulus package this month in the latest bid to stoke growth in the limp economy. The figure also includes local government and private-sector spending.

 

Tokyo's new forecast will be used to produce a fresh budget with Abe's cabinet set to endorse a ¥92.6 trillion in spending on Tuesday, Japanese media reported. — Agence France-Presse