Japan central bank cuts GDP growth forecast to 1.5% from 2.2%

30 October 2012 10:49  [Source: ICIS news]

SINGAPORE (ICIS)--Japan’s economy will expand at a slower pace of 1.5% in the current fiscal year ending March 2013, down from a 2.2% growth forecast made in July, prompting a new round of monetary easing measure from the country's central bank.

After announcing a cut in its GDP growth forecast on Tuesday, the Bank of Japan (BOJ) said it will further expand its asset purchase programme by yen (Y) 11,000bn ($138bn) to Y91,000bn, to be completed in end-2013, in a bid to boost domestic activities in the world’s third largest economy.

"The Bank of Japan judged it appropriate to undertake further aggressive monetary easing policies in order to prevent Japan's economy from deviating from the path of returning to a sustainable growth path with price stability," it said in a statement.

Japan's economy grew by about 3% in the first half of 2012 as domestic demand remained firm, backed by public and private investments related to reconstruction efforts after the March 2011 earthquake and tsunami in the northeastern part of the country, the central bank said.

“Thereafter, however, the economy has been weakening  somewhat as exports and industrial production have decreased, reflecting the fact that overseas economies have moved deeper into a deceleration phase,” it added.

By: Nurluqman Suratman

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