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Japan's government downgrades its outlook for growth | Japan's government downgrades its outlook for growth |
(about 2 hours later) | |
The Japanese government has downgraded its assessment of the economy in the wake of the devastation caused by last month's earthquake and tsunami. | The Japanese government has downgraded its assessment of the economy in the wake of the devastation caused by last month's earthquake and tsunami. |
It said key areas of the economy, including industrial production and exports, would suffer. | It said key areas of the economy, including industrial production and exports, would suffer. |
It marks the first time in six months that the government has downgraded its assessment. | It marks the first time in six months that the government has downgraded its assessment. |
On Monday, the International Monetary Fund (IMF) cut its forecast for Japanese growth. | On Monday, the International Monetary Fund (IMF) cut its forecast for Japanese growth. |
"The economy is showing weakness recently due to the influence of the Great East Japan earthquake," the Japanese government said in its monthly economic report. | |
Downward direction | Downward direction |
The damage caused to the Fukushima Daiichi nuclear plant has seen a shortfall of power supplies in Japan. | The damage caused to the Fukushima Daiichi nuclear plant has seen a shortfall of power supplies in Japan. |
That has resulted in rolling blackouts, affecting production at some of the country's biggest companies. | That has resulted in rolling blackouts, affecting production at some of the country's biggest companies. |
The government has warned of the negative impact of the power shortage. | The government has warned of the negative impact of the power shortage. |
It has cut its assessment of the country's exports, saying shipments may decline as manufacturers battle to get their production lines back to full capacity. | It has cut its assessment of the country's exports, saying shipments may decline as manufacturers battle to get their production lines back to full capacity. |
The Japanese economy had already been struggling to come out of the global financial crisis before the earthquake and tsunami hit the north-east coast. | |
Analysts say the twin natural disasters have set back that recovery process even further. | |
"The condition of the economy is no longer flat or at a standstill, but rather the direction is downward," said Shigeru Sugihara, director of macroeconomic analysts at the cabinet office. | "The condition of the economy is no longer flat or at a standstill, but rather the direction is downward," said Shigeru Sugihara, director of macroeconomic analysts at the cabinet office. |
Nuclear crisis | Nuclear crisis |
Japan's problems have been made worse by the uncertainty surrounding the developments at the Fukushima Daiichi nuclear plant. | Japan's problems have been made worse by the uncertainty surrounding the developments at the Fukushima Daiichi nuclear plant. |
On Tuesday, Japan's Nuclear and Industrial Safety Agency raised the severity of the crisis at the plant to the highest level, seven. | |
This level was previously applied to the 1986 Chernobyl disaster in Ukraine. | This level was previously applied to the 1986 Chernobyl disaster in Ukraine. |
The move prompted fears that the situation at the Japanese plant may be worsening. | The move prompted fears that the situation at the Japanese plant may be worsening. |
However, Japan's Prime Minister Naoto Kan has sought to allay fears. | |
"Step by step, the reactors in the Fukushima Daiichi power plant are moving toward stability." Mr Kan said. | "Step by step, the reactors in the Fukushima Daiichi power plant are moving toward stability." Mr Kan said. |
"People should not fall into an extreme self-restraint mood. They should live life as normal," he added. | "People should not fall into an extreme self-restraint mood. They should live life as normal," he added. |