Japan Predicts an Easing of Growth From 5.2% to 3.8% : Economy: The 1991-92 fiscal year also will see a narrowing of its trade surplus and a 9.2% surge in imports, the government forecasts.

Japan is forecasting slower economic growth and small declines in its trade and balance of payments surpluses in the fiscal year starting April 1.

The government predicted Saturday that gross national product would grow 3.8% in real terms in 1991-92 after rising 5.2% in the current year.

Japan’s trade surplus is expected to narrow to around $56 billion next fiscal year from an estimated $57 billion this year. The surplus in the current account of its balance of payments is seen shrinking to about $30 billion from around $32 billion.

“Japan’s economy, although slowing a bit, will keep growing next fiscal year, led by domestic demand,” said an official of the Economic Planning Agency, which released the forecasts.

He said the economy, which entered its fifth year of expansion this month, was likely to enjoy its longest post-war growth period. The longest boom previously was 57 months--from November, 1965, to July, 1970.

Economic planning officials said Japan’s exports are expected to rise about 7% to $305 billion in 1991-92 from $285 billion in 1990-91, while imports are expected to swell by about 9.2% to $249 billion from $228 billion.

The government forecast that consumer prices would rise 2.4% in 1991-92 after increasing 3.1% this fiscal year. But it said wholesale prices will drop 0.1%--due mainly to the yen’s continued strength--after rising 2% in 1990-91.

Unemployment is expected to average 2.2% in 1991-92, unchanged from 1990-91. The government expects industrial production to rise 4.1% after growing 5.5% this year.

The forecasts are based on the assumption that the Gulf crisis will be resolved with no major military conflict and that oil prices will average $25 per barrel. It also assumes an average dollar/yen exchange rate of 128.10 yen. The dollar is currently at around 135 yen.

Officials said domestic demand should remain strong, led by consumer spending and corporate capital investment.

The government forecast expects consumer spending to grow by a real 4.1% in 1991-92 after rising 4.2% this year, while capital spending should increase 6.8% after growing 11.7%.

But private housing investment, hurt by higher domestic interest rates, will likely contract by 2.7% in 1991-92 after rising 8.4% in 1990-91, the forecast said.

The government said domestic demand would contribute four percentage points to real growth in gross national product during 1991-92, but external demand would trim growth by 0.2 percentage points.

In the current fiscal year, domestic demand will contribute 5.5 percentage points to real growth, while external demand will slow economic expansion by 0.3 points, the officials said.