Econintersect: In April the Asian Development Bank estimated economic growth for 2011 in Japan would be 1.5%. Today (July 29) the estimate has been changed to -0.5%. The change is attributed to the impact of the March 11, 2011 earthquake and tsunami which created massive losses of life, property and productive capacity. Apparently the extent of the damage was not fully recognized the month after the disaster. The outlook for 2012 is for GDP growth of 3.2%.From The Japan Times:
In a report titled “Asian Development Outlook 2011,” the Manila-based bank says private consumption and investment in Japan will be weighed down in 2011 by the impact of the disaster and the nuclear crisis.
The bank said electricity supply constraints and disrupted supply chains in the manufacturing sector are likely to continue to affect production. The yen’s rise is also expected to hurt exports, it added.
Curiously, the electricity supply constraints in Japan may add to energy cost inflation and impact the overheating economies elsewhere in Asia.
Source: The Japan Times