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177313
Fri, 04/22/2011 - 18:11
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https://oananews.org//node/177313
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BOJ to cut FY 2011 economic growth forecast due to quake
TOKYO (Kyodo) - The Bank of Japan will downwardly revise its forecast for the country's economic growth in fiscal 2011 amid the negative impact from the March 11 earthquake and tsunami, sources close to the matter said Friday.
The central bank is expected to project in its outlook report due next week that the nation's real gross domestic product would expand 0.1 to 0.9 percent in the year through next March from the previous 12 months, compared with 1.6 percent growth forecast in January, the sources said.
For fiscal 2012, however, the bank will likely upgrade its earlier projection of 2.0 percent growth, based on the view that the economy would regain a foothold on a possible surge in domestic demand as reconstruction work proceeds.
In the biannual report, the BOJ could show its main scenario that the economy would return to a moderate recovery path as early as this fall after decelerating in the April-June period, the sources added.
On prices, the bank is expected to forecast that the core consumer price index, excluding fresh foods, will rise at a faster rate in fiscal 2011 than 0.3 percent year on year projected three months earlier, mainly affected by the recent sharp increase in crude oil prices.
The quake adversely impacted the economy mainly through a slowdown in production as a result of nationwide supply disruptions affecting crucial components for carmakers and electronic device manufacturers.
But BOJ policymakers broadly agree that the economy would recover, led by robust exports to emerging economies especially in Asia, once the bottlenecks in production as well as electricity supply shortages due to damaged power stations start to be addressed after summer.
The outlook report will be released after the BOJ Policy Board holds a one-day meeting on Thursday.
In the previous meeting earlier this month, the BOJ decided to introduce a 1 trillion yen emergency loan program to encourage commercial lenders in quake-hit areas to play key roles in the early phase of reconstruction by channeling money to firms facing problems keeping their businesses going after the disaster.
The board this time around is expected to formally agree on the details of the loan program such as the schedule for launching it in May.
The central bank is expected to project in its outlook report due next week that the nation's real gross domestic product would expand 0.1 to 0.9 percent in the year through next March from the previous 12 months, compared with 1.6 percent growth forecast in January, the sources said.
For fiscal 2012, however, the bank will likely upgrade its earlier projection of 2.0 percent growth, based on the view that the economy would regain a foothold on a possible surge in domestic demand as reconstruction work proceeds.
In the biannual report, the BOJ could show its main scenario that the economy would return to a moderate recovery path as early as this fall after decelerating in the April-June period, the sources added.
On prices, the bank is expected to forecast that the core consumer price index, excluding fresh foods, will rise at a faster rate in fiscal 2011 than 0.3 percent year on year projected three months earlier, mainly affected by the recent sharp increase in crude oil prices.
The quake adversely impacted the economy mainly through a slowdown in production as a result of nationwide supply disruptions affecting crucial components for carmakers and electronic device manufacturers.
But BOJ policymakers broadly agree that the economy would recover, led by robust exports to emerging economies especially in Asia, once the bottlenecks in production as well as electricity supply shortages due to damaged power stations start to be addressed after summer.
The outlook report will be released after the BOJ Policy Board holds a one-day meeting on Thursday.
In the previous meeting earlier this month, the BOJ decided to introduce a 1 trillion yen emergency loan program to encourage commercial lenders in quake-hit areas to play key roles in the early phase of reconstruction by channeling money to firms facing problems keeping their businesses going after the disaster.
The board this time around is expected to formally agree on the details of the loan program such as the schedule for launching it in May.
