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Monday, 14th March 2011
In Business In Japan,

National economy to 'recover within a year', say analysts

While the human impact of last week's earthquake may not be known for weeks, economic analysts are already claiming that Japan's economy could recover by the end of the year.

Prime minister Naoto Kan has described the situation following the 9.0-magnitude earthquake as "the most severe crisis since World War II".

However, he added that he expected the next few months to result in a "restoration New Deal" to kick-start economic growth.

Furthermore, the demand for large-scale rebuilding is expected to trigger a significant growth in GDP, according to the BBC's economics editor Stephanie Flanders.

"Japan has been trapped in its deflationary malaise for so long, [and] officials have often talked in the past about the need for some kind of major economic shock to bring the country out of it," she wrote on her blog.

This sentiment was echoed within Japan itself, as Shogo Maeda, head of Japanese equities at Schroders, said today that "with the progress in relief work and the recovery in infrastructure the economy should once again return to a recovery track".

Written by Kimberley Homer

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