TOKYO, May 24 (Reuters) – Japanese Economics Minister Kaoru Yosano said on Tuesday he expects the country’s economic growth to slow to about 0.6 to 0.7 percent in the fiscal year that started on April 1, modifying a more upbeat forecast he gave just one week ago while warning of lingering challenges.
Yosano last week said the economy should grow nearly 1 percent in 2011/12.
“What I meant was that growth is likely to slow by nearly 1 percent (from the government’s current forecast). It is likely to slow to about 0.6 percent to 0.7 percent,” Yosano told a news conference.
He said it was likely to take time for supply chains to be fully restored while power supply constraints and deterioration in consumer and business confidence was also hurting the economy.
“There are several negative factors besides damage to production facilities,” Yosano said.
The Bank of Japan last month lowered its growth forecast for the current fiscal year to 0.6 percent, down from a 1.6 percent projection issued three months ago, but it expects growth to accelerate in the following year.
The government’s official projection currently stands at 1.5 percent growth for the 2011/12 fiscal year but it is due to be revised in coming months.
Japan’s economy grew 2.3 percent in the fiscal year that ended in March.
Category: Business News