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"GDP will slow very sharply in the current quarter"
- Kiichi Murashima, chief economist at Citigroup Global Markets Japan Inc.
Japanese economy grew 1.5 percent in the third quarter 2011, compared to the previous 3 months, but outlook remains clouded with strong yen and faltering global economic growth, said the Cabinet Office on Monday.
"GDP will slow very sharply in the current quarter," said Kiichi Murashima, chief economist at Citigroup Global Markets Japan Inc. in Tokyo. Strong yen and debt problems in Europe are "very strong headwinds" for the country's manufacturers, he told.
"Looking further ahead, public works spending is likely to start rising as reconstruction work gathers pace and this will contribute to GDP. However, external demand isn't likely to contribute much to Japan's growth in the future due to Europe's problems," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.