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Japanís economy is expected to slow significantly this year

April 21/2011

(ICIS) -- Japanís economy is expected to slow significantly this year on the back of the devastating earthquake and tsunami which struck the countryís northeast last month, the Organisation for Economic Co-operation and Development (OECD) said in a report on Thursday.

Japanís GDP will expand by 0.8% in 2011, down sharply from a 1.7% growth forecast made in a November report last year, the Paris-based OECD said.

Damage to electricity shortages and the disruption of supply chains is projected to significantly reduce output in the second quarter of 2011, although it is likely to be relatively mild compared with the 20% year-on-year drop following the 2008 global financial crisis, the OECD said.

Material damage from the disasters alone could top USD 300 bln, according to government estimates.

Output is expected to rebound sharply from the third quarter of 2011, driven by reconstruction-related fixed investment, but private consumption could remain subdued for the remainder of the year as a result of weak consumer sentiment, the OECD added.

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