Bank of Japan lowers economic growth forecasts

| July 12, 2011 | 0 Comments

The Bank of Japan (BOJ) has today revised its growth forecast for the economy following the earthquake and tsunami which struck in March.

The twin disasters forced the country back into a recession after industrial output suffered a record drop and spending dived as consumer and business confidence took a battering.

The Japanese economy, which is the world’s third largest, contracted by 0.9% in the first quarter after contracting in the final quarter of 2010, pushing it back into a recession.

As a result, the central bank is now forecasting growth to be 0.4% for the fiscal year, down from the 0.6% it estimated in April.

The revised forecast came after a two-day policy meeting which started Monday. This also resulted in the bank electing to keep interest rates at the record low in the range of zero to 0.1%.

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