Threadneedle's Burgess slashes Japan growth forecast

The impact of the Japan earthquakes in causing short-term plant closures and supply chain disruptions has led Threadneedle to slash its forecast for the country's growth from 1.5% to 0.9% for 2011.

The firm's CIO Mark Burgess says the immediate disruption to production in Japan, however, will be recouped in 2012 and forecasts 2.5%-3% growth that year, bolstered by reconstruction efforts. "Clearly there will be a large, immediate hit to GDP in H1 (estimate - 0.5%) but this will be followed by the rebuild," he says. "If history is a guide, this will add strongly to growth over the following 12-18 months. "It is likely to bring about the first string of positive CPI prints since early 2009." Nonetheless, the rebuild is estimated to be as much as $300bn and Japan's debt-ridden go...