WASHINGTON: The oil cartel OPEC forecast on Saturday negative growth in Japan this year after the March 11 earthquake disaster, but IMF economists said all depends on the restoration of power supplies.
"The recent tragic events in Japan are having a strong impact on the country's economic growth," said Hasan Qabazard, economist for the Organization of the Petroleum Exporting Countries.
"The projection for Japan's growth for this year has been lowered to minus 0.1 percent from (positive) 1.5 percent," he said in a statement to the International Monetary Fund's policy-setting monetary and financial committee.
But IMF economists stuck with their positive 1.4 percent forecast issued earlier this week, while stressing "great uncertainties" posed by power outages and the reconstruction challenges.
"This forecast is subject to significantly more uncertainty than normal, and that's because of the power disruption situation," Mahmood Pradhan, the IMF's mission chief, said Saturday.
He said the March 11 quake and tsunami, which left 13,000 dead and 14,000 missing, and forced a shutdown of major nuclear power plants, had a "very large negative impact" on Japan's growth during the first and second quarter of the year.
The power cutoff has forced many factories into hibernation, interrupting the parts and materials supply chain for the country's huge industrial machine.
The IMF's 1.4 percent growth forecast assumes "that we have some normalization of power towards the end of the summer," he said.
If power stations do not get back on line, that would force a rethink of the forecast, he said.
Anoop Singh, the IMF's Asia-Pacific director, said another key uncertainty is how fast Tokyo can get its special reconstruction budget moving.
The timing of all this is going to be very important to determine when the bounceback takes place," he said.
"The uncertainties are so great at ths moment, meaning that we cannot be sure when this will happen."
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