Saturday September 15, 2012
Japan may stall for rest of 2012
TOKYO: Japan's export-reliant economy will likely stall for the rest of 2012 as it struggles due to Europe's relentless debt crisis, a subdued China economy and a persistently strong yen, a Reuters poll shows.
A worse-than-expected growth rate in the AprilJune quarter further prompted analysts to cut their forecasts for the second half of this year, taking them to levels not seen since polling on that period began in February 2011.
The economy will probably flatline this quarter before growing a mere 0.1% in the next, according to the poll of more than 20 economists conducted on Sept 1013.
Sixteen of the 18 common participants between the August and September polls scaled back their growth forecasts for the fiscal year ending March 2013.
Japan's economy is now expected to grow at 1.8% this fiscal year, which is not only lower than last month's 2.2% prediction but is also less than projections made by the government and the Bank of Japan.
“There is a risk the economy in JulySeptember will contract, dragged down by a weak global economy,” said Yoshimasa Maruyama, chief economist at Itochu Economic Research Institute.
“But I expect the economy in China and the United States will pick up later this year, which would also help Japan's exports from early next year although it won't push up the economy strongly,” Maruyama added.
Despite consistently downgrading their growth outlook for the world's third largest economy, survey participants have maintained the chance Japan will have a recession in the next 12 months at 30%. - Reuters