Chief Cabinet Secretary Yasuo Fukuda said Monday the government will revise downward its real economic growth target of 1.7 percent for the current fiscal year and announce a new figure Friday, ruling bloc legislators said.
Fukuda's comments were made to senior government officials and ruling coalition lawmakers at the Diet building and were an apparent reference to a government plan to restate the projection as an economic contraction.
The government is considering revising the target to around minus 1 percent, after the economy faltered both on a drop in demand in the information technology sector and from aftereffects of the Sept. 11 terrorist attacks in the United States, government sources said.
Neither did Fukuda rule out the possibility of compiling a second extra budget for the current fiscal year, saying, "We will deal with it in a flexible but bold manner in the future."
Prime Minister Junichiro Koizumi said Friday he will take additional steps "as the occasion demands" in relation to a second supplementary budget.
"I will not make us go down in a deflationary spiral," Koizumi told reporters en route from Tokyo to Shanghai, where he attended the weekend summit of the Asia-Pacific Economic Cooperation forum. "I will not cause confusion in the Japanese economy, including finances."