The Cabinet of Prime Minister Zenko Suzuki today decided to spend $7.7 billion on a series of economic relief measures in a bid to bail Japanese businesses out of a deepening slump.

The announcement, which outlines a boost in government-financed public works projects and loans to Japanese home builders, was widely interpreted here as a political compromise between Suzuki, who remains committed to budget-balancing as a goal, and "supply-siders" within his Cabinet arguing for increased government spending to help fuel business recovery.

The compromise package came amid mounting public criticism of the Suzuki government's tight-fisted fiscal policies and, in the view of many economic analysts here, it did little to resolve the deep differences of opinion among politicians, business leaders and government officials over the best way to reverse the increasingly gloomy outlook for Japan's economy.

A sharp drop in the country's vital exports so far this year prompted the government, in a separate statement today, to announce that the economy is now expected to grow by only 3.4 percent in the current fiscal year (ending next March), compared to an earlier government forecast of 5.2 percent. Yesterday, Japanese trade experts warned that exports in 1982 were likely to register their first overall decline, on a yearly basis, in three decades.

To be sure, Japan appears in enviable shape compared to the United States and Western Europe. Inflation and unemployment here are now below 3 percent and the current business downturn has done little to affect the high rates of productivity and investment among the country's major industries.

What worries a growing number of private economists here, however, is what they view as top government leaders' failure to deal squarely with a new set of more chronic problems. Among them are huge government deficits that go to support debt-ridden state-run enterprises, rapidly rising welfare payments to burgeoning entitlement groups, and the quickly changing structure of Japanese industry, which may mean fewer jobs and more business failures in the years ahead.

"Government officials and politicians seem to be in a state of confusion," said Zenichi Ishikawa, a senior analyst at Daiwa Securities.

The growing disagreement on economic issues has helped spark a rare public feud between Suzuki and key Cabinet officers. Suzuki, whose Liberal Democrats have steered the economy for 27 years, has insisted that top priority be given to slashing Tokyo's bulging deficits and balancing the budget by 1984.

Toshio Komoto, who heads Japan's economic planning agency, and Shintaro Abe, minister of international trade and industry, meanwhile have led a vigorous campaign for increased government spending to help revive flagging business activity.

All three men, political rivals each backed by influential factions within the ruling party, have their eye on elections for party president this fall. Suzuki remains the odds-on favorite in the race, which effectively carries with it the premiership, but his two opponents have hoped to score points with voters by discrediting Suzuki's handling of the economy.

Suzuki, with the strong backing of Japan's powerful Finance Ministry, is "wedded to the philosophy that you've got to balance the budget," said Eric W. Hayden, senior economist at the Bank of America's Asia headquarters in Tokyo. Philosophically, he said, officials have remained committed to a policy of expanding exports to fuel the economy when times are tough and this "supply-side" boost has in the past helped keep revenues rolling in to combat government deficits.

Growing resistance to Japanese exports in the West, however, has now clouded the long-term outlook for overseas sales and, according to private analysts here, confronted Tokyo with the need for a more active role in stimulating domestic demand.

"What's happened," Hayden said, "is that the Japanese, who have traditionally been supply-siders, have understood Reaganomics a little too well. It's a myopic vision of economic success . . . The government is running the risk of finding that their economy doesn't walk on water."

Private economists here argue that Japan's high rate of individual savings -- 20 percent, compared to roughly 5 percent in the United States -- means that, unlike the U.S. economy, Japan's has plenty of funds available to finance a chronic government deficit and, at the same time, provide adequate reserves for borrowing by private industry.

Finance officials assert, however, that the size of the current deficit--larger, as a percentage of gross national product, than that of the United States or any country in Western Europe -- proves the wisdom of Tokyo's austere budget policies.

The real culprit, critics in the private sector assert, is government mismanagement. Debt payments at Japan National Railways alone account for nearly 20 percent of the yearly national budget. Reducing waste in such state-run enterprises, they argue, would allow Tokyo to make more constructive use of deficit spending that will be unavoidable in the years ahead. A government-appointed panel of top business executives recently recommended that the rail system be divided up and sold to private industry, but the proposal outraged its 450,000 employes and chances for its early enactment appear dim.

Suzuki's Liberal Democrats, meanwhile, have resisted politically unpopular tax increases to help make up Tokyo's severe revenue shortfalls. This is at a time when the rapid aging of Japan's population is creating a large pool of senior citizens that will dramatically boost future costs for welfare and pension payments, and medical care.

Another concern is the increasing gap between the country's giant corporations with their strong export bases and the small- and medium-scale businesses that account for more than 60 percent of domestic economic activity. The large organizations, economists argue, have the financial resources to invest in the latest technology to ensure their future productivity and profitability. Smaller companies, however, are likely to find it difficult to keep pace in the rush to computerize offices and factories that will be needed to maintain a competitive edge.

"This could produce a conflict between management and labor, big industries versus small ones," Daiwa Securities' Ishikawa says. "And the government is lagging behind in dealing with these anticipated changes."