BOJ chief expects GDP to shrink

10 years ago by in Travel

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With most global economic organizations voicing their opinion on the state of Japan’s Economy, the Bank of Japan (BOJ) has joined the fray and admitted that the economy is expected to shrink over the next two quarters.

Supply concerns continue to plague the country and were cited by the bank as the main reason behind the contraction in the economy. Masaaki Shirakawa, the governor of the BOJ said in an interview with Reuters that he expects GDP to drop in the first and second quarter. The BOJ is expecting supply problems to be resolved by late summer or early autumn.

This week will be busy for the central bank as it plans to release its twice yearly economic outlook report, when it will officially announce its economic forecast. At the same meeting, the bank will also discuss interest rates.

Analysts and economists are not expecting the bank to signal more easing anytime soon.Currently interest rates remain steady at 0.1 percent – virtually zero. Last week the Organization for Economic Co-operation and Development released a report saying they expect GDP to drop to 0.8 percent this year. [RT]