The government's Council on Economic and Fiscal Policy plans to effectively revise downward Japan's fiscal 2001 economic growth target to a real 0.5 percent from the current 1.7 percent, government sources said Saturday.

The panel, headed by Prime Minister Junichiro Koizumi, plans to incorporate the revision as a "reference figure" in its basic policy, to be compiled Thursday.

The government will endorse the basic policy at a Cabinet meeting later this month, but the new 0.5 percent growth will not be officially adopted by the Cabinet. The 1.7 percent target was set at a Cabinet meeting in December when the government compiled the fiscal 2001 annual budget.

The council expects Japan to have low growth — hovering close to zero — for the next two to three years as Koizumi puts priority on structural reforms over economic growth.

Japan's economy contracted a real 0.2 percent in the January-March period. As a result, Japan's GDP growth during fiscal 2000, which ended in March, reached 0.9 percent — short of the government's target of 1.2 percent.

The panel also plans to incorporate in the basic policy its estimation that between 150,000 and 200,000 people will lose their jobs as major banks dispose of 12.7 trillion yen in bad loans over the next two to three years.

, in line with the guidelines spelled out in the government's emergency economic package released in April, the sources said.

Japan's unemployment rate stood at 4.8 percent in April, with the number of unemployed totaling 3.48 million and the number of people who left their jobs against their will at 1.11 million.