Japan’s real economic growth is seen coming to 1.5 pct in 2011, down 0.2 to 0.3 percentage point from the baseline forecast, due to the effects of the March 11 earthquake and tsunami, the U.N. Economic and Social Commission for Asia and the Pacific said Thursday.
ESCAP said that a one-point fall in Japan’s economic growth is estimated to lower China’s growth rate by 0.12 point and South Korea’s growth by 0.06 point.
Still, the growth rate for the entire Asia-Pacific region would be cut by only 0.1 point even if Japan’s growth drops one point, ESCAP said, noting that the direct impact on the region will be limited.
It said the underlying assumption is that the impact of the disaster on Japan’s economy “will be limited so long as major economic centers such as Tokyo avoid prolonged disruption.” ESCAP also said that “reconstruction in the affected area should provide an economic boost” in 2012.
Meanwhile, the report warned that postdisaster reconstruction will “clearly result in enormous spending, with careful consideration required on the appropriate financing mix through borrowing and revenue generation in order to ensure both fiscal sustainability and growth recovery.”