Authorities also repeated a warning to pay sufficient attention to the downside risk a resurgence in COVID-19 infections poses to the economic outlook.
"The economy shows increased weakness in some parts, though it continued picking up amid severe conditions due to the coronavirus," the government said in the report.
The government cut its assessment of the overall economy for the second time this year, after also doing so in February, which was its first downgrade in 10 months.
Among its key economic elements, authorities lowered their view of private consumption, which makes up more than half of gross domestic product (GDP).
The government said private consumption was showing weakness especially centred on services spending, which was a notch lower than the previous assessment, when it said it remained weak.
While sales of new cars and household electronics remained largely flat, average weekly spending was decreasing compared to 2017-2019 levels.
The government also lowered its view on business conditions, as a pickup showed signs of stalling, the economic report said.
Exports continued to increase moderately, while production and capital spending were picking up, all unchanged from the previous month, it said.
The government was expected to compile an extra budget in October or November, a ruling party lawmaker told Reuters on Wednesday, calling for spending of around $239 billion to offset the economic hit from the pandemic.
The world's third-largest economy likely grew at a slower-than-initially-expected pace in the current quarter due to ramifications of the coronavirus emergency curbs, following a sharp decline in the first quarter.
The government will release revised first-quarter GDP figures on June 8.
(Reporting by Daniel Leussink; Editing by Muralikumar Anantharaman)
By Daniel Leussink
