Japan's economy may shrink at record pace in FY 2008-2009: BOJ

TOKYO, Jan. 22 Kyodo -
The Bank of Japan downgraded its estimates for the country's economic growth
Thursday, saying the world's second-biggest economy may contract at a record
pace in the postwar era for two years in a row.
Reviewing its biannual Outlook for Economic Activity and Prices report released
in October, the central bank said it expects the nation's real gross domestic
product to fall 1.8 percent in fiscal 2008 through March from the previous year
and decline 2.0 percent in fiscal 2009.
If realized, those figures would be the fastest rate of contraction since the
end of World War II, topping the 1.5 percent fall marked in fiscal 1998.
The BOJ had forecasted the real GDP in the current and next fiscal year would
grow 0.1 percent and 0.6 percent, respectively, in its October projection.
For fiscal 2010, it expects the economy to expand 1.5 percent, down from a 1.7
percent growth.
The BOJ also said it forecasts the nation's inflation rate, gauged by the
consumer price index, excluding volatile fresh food prices, will rise 1.2
percent in the current fiscal year from the previous year, against an initial
estimate of 1.6 percent growth.
The central bank also revised downward its CPI projection for fiscal 2009 to a
1.1 percent drop, compared with an earlier forecast that the year-on-year
change in the core nationwide CPI would remain flat from the previous year.
The BOJ expects the inflation rate will contract 0.4 percent in fiscal 2010
through March 2011, also sharply lowered from an earlier projection of a 0.3
percent increase.
==Kyodo
2009-01-22 21:15:37