World News Engine: Bank of Japan to halve growth forecast: report

Bank of Japan to halve growth forecast: report

The Bank of Japan is expected to downgrade its economic growth outlook for the year to March 2012 from 1.6 per cent to around 0.8 per cent in light of the deadly disasters in March, a report said on Monday.

However, in its upcoming Outlook for Economic Activity and Prices, to be released on Thursday, the central bank will predict a rebound starting late this year on recovering output and reconstruction demand, the Nikkei daily said.

Growth of 0.8 per cent would be bullish compared with the average private-sector projection of slightly more than 0.4
per cent, the business daily added.

The news report came as BoJ governor Masaaki Shirakawa joined private economists in expecting an economic contraction in the first half due to the 9.0-magnitude earthquake and tsunami of March 11.

The disasters battered an atomic power plant, triggering the worst nuclear crisis since Chernobyl in 1986.

The disasters in the northeastern region killed 14,300 people and left 11,999 missing, and forced evacuation of more than 150,000.

The region's infrastructure, businesses and factories were destroyed, while many local residents were left without jobs.

The central bank is expected to upgrade its fiscal 2012 growth forecast from 2.0 per cent to the upper half of the 2.0-per cent level, the Nikkei said.

Output and exports are expected to recover as supply chain disruptions are alleviated and reconstruction demand starts picking up momentum, the Nikkei said.

Once the economy overcomes summer electricity shortages, a positive trend could emerge in the October-December quarter, paving the way for a return to steady growth in fiscal 2012

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