NEW YORK--Governor of the Bank of Japan Masaaki Shirakawa told the Wall Street Journal in an interview April 22 that he expects negative growth for Japan's economy for the first and second quarters of 2011, due to the effects of the Great East Japan Earthquake. He put primary blame on sluggish output due to supply shortages.
NEW YORK--Governor of the Bank of Japan Masaaki Shirakawa told the Wall Street Journal in an interview April 22 that he expects negative growth for Japan's economy for the first and second quarters of 2011, due to the effects of the Great East Japan Earthquake. He put primary blame on sluggish output due to supply shortages.
Shirakawa said sufficient domestic demand existed after the disaster, but that a "severe supply shock" was making it difficult to meet demands. He said he expected the real gross domestic product to shrink for the first half of this year due to stalled production.
He added that shortages of electrical power caused by the accidents at the Fukushima No. 1 nuclear power plant could last until August, pointing out that shortages in power may prolong the disruption in production.
He said Japan's economy will return to its original pattern of growth once supply capacity is restored. The central bank, he said, is carefully monitoring the situation and is ready to take additional action when necessary.
Private research institutes have released similar projections on Japan's economic growth, but this is the first time the BOJ governor has mentioned negative growth.