Japan is expecting further economic problems due to difficulties of its biggest Asian trading partner, China, that may soon announce the lowest quarterly growth since the beginning of 2009.
“The slowdown in the global economy is becoming more widespread,” the Cabinet Office in Tokyo said in a report released on Monday.
China’s quarterly growth may be 7.4 percent, the least since the first quarter of 2009, according to analyst estimates. The main reasons are struggling domestic demand and slow export growth.
“We face the probability of a slowdown in the short term” in China, said Takahiro Sekido, a former official of the Bank of Japan and currently strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in Tokyo, quoted by Bloomberg.
Japan’s growth perspective may be hurt by “sharp fluctuations” in financial markets due to global uncertainty, the Japanese government added. Even if Japan is “on the way to recovery at a moderate pace”, problems in Europe, China and elsewhere may put an additional burden on Japan’s economy, the government said.