15 October 2001, 11:43  Japan 2001 GDP forecast cut to minus 1.5 pct by ING Barings

TOKYO (AFX-ASIA) - ING Barings said it revised down its growth forecast for Japan to negative 1.5 pct for 2001 and positive 0.6 pct the following year, cutting both by 0.2 percentage points. However, the brokerage added that while the Sept 11 attacks on the US are obviously negative for the economy, they will encourage the government to speed up its response to poor economic fundamentals. "Major uncertainties relate to the world economy and to measures related to the Japanese financial system," chief economist Richard Jerram said in a report issued today. "September's events have generated some sense of urgency among policy makers. However, the challenge remains will these policy responses offer the prospect of resolve some of Japan's deeper problems," he said. "The real turning point for Japan should not be expected before second quarter 2002 and even then the pace of recovery is likely to be slow." Jerram said the policy responses could include financial restructuring, as well as monetary and fiscal easing.

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