Japan's Economy to Slide Further Next Year: IMF

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Last updated at: (Beijing Time) Thursday, December 20, 2001

Japan's Economy to Slide Further Next Year: IMF

Most Asian economies will strengthen next year after being hit hard by a worldwide slowdown but Japan will sag further, posting back-to-back yearly contractions for the first time in the post-World War II period, according to a report released on Tuesday.

The International Monetary Fund (IMF), in an updated assessment of economies around the world, said the 'key uncertainty' throughout Asia was the outlook for exports, especially in the technology sector.

Demand for Asian goods from abroad, particularly from the United States, has softened over the past year due to an economic slowdown that was exacerbated sharply by the Sept 11 attacks.

The IMF raised its growth estimate for the newly industrialised Asian economies, which include Hongkong, Singapore and Taiwan, to 2 per cent next year, up from the previous forecast of 1.7 per cent and far above the 0.4 per cent estimated for this year.

It also raised its forecast for Japan's economic output next year to a 1 per cent contraction, from the 1.3 per cent shrinkage estimated by the fund in its last report in mid-November.

The IMF estimated that the Japanese economy would shrink 0.4 per cent this year.

It recommended that Japan implement further 'quantitative easing' to stop deflation and help the economy.

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