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Japan's Economic Forecast Downgraded but Remains Positive
The Bank of Japan is now expecting its economy to shrink 3.4 percent, higher than its previous forecast of 3.1 percent, "in the 12 months to 31 March 2010".
This is a tremendous improvement from the contraction of 12.7 percent during the October to December 2008 period. The central bank affirms that "Japan's economic conditions have stopped worsening". The Japanese economy, whose growth heavily relies on exports of automobiles and electronics, has suffered in the past year. The falling global demand for the products has caused the economy to weaken. However, second quarter reports show that both exports and industrial production, which increased by 5.7 percent in this past May, have started to improve. They expect a recovery in the third and fourth quarter of 2009. Analysts agree with the expectation of the country's recovery: "They are definitely correct when they say the economy overall has stopped worsening," said Nikhilesh Bhattacharyya of Moody's Economy.read source article