Japan's central bank downgrades GDP forecasts for FY 2010, 2011

16:40, October 28, 2010      

Email | Print | Subscribe | Comments | Forum 

The Bank of Japan (BOJ) on Thursday revised downwards its fiscal 2010 real GDP forecast to 2.1 percent from its July projection of 2.6 percent and 1.8 from 1.9 percent forecast for fiscal 2011.

In the central bank's semi-annual outlook report, GDP projections for fiscal 2012 were forecast to rebound 2.1 percent, although economists commented this far exceeds the nation's likely growth rate, which was estimated by the bank to be around 0.5 percent.

With regard to the current state of Japan's economy, the BOJ reported that the economy still shows signs of a "moderate recovery but the pace is slowing down as growth in exports and production has recently been decelerating."

"In the second half of fiscal 2010, the pace of recovery is likely to slow due to factors such as the slowdown in overseas economies and the ending of the boost from policy measures targeted at durable consumer goods, as well as the recent appreciation of the yen," the central bank said.

In terms of Japan's financial conditions, the bank said conditions have continued to show signs of easing.

"In the money market, while the Bank is pursuing powerful monetary easing through, for example, the virtually zero interest rate policy, the overnight call rate has remained at extremely low levels, interest rates on term instruments have declined, and the yield curve has flattened further," said the report.

As for prices, the bank said the nation's core consumer price index, which excludes fresh food prices, could fall 0.4 percent in fiscal 2010 and rise 0.1 percent the following year, unchanged from earlier forecasts.

The domestic corporate goods price index (CGPI) is expected to continue rising moderately on a year-on-year basis, however, due mainly to the improvement in the aggregate supply and demand balance, the bank said.

In addition the bank noted that developments in commodity prices could have a positive bearing on the economy in spite of the influence of the yen's strength.

The central bank said that corporate and consumer sentiment needs to be closely monitored for swings related to uncertainty over global growth and financial markets.

Source: Xinhua


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion