The recent Japanese earthquake may cause the world economy back into a double dip recession situation, RAM Ratings Chief Economist Dr Yeah Kim Leng said."The quake may shave 2%-5% of the Japanese GDP for this year. From the experience of the Kobe quake, that disaster shaved off 2% of the Japanese economy at that time," Yeah told reporters at the RAM-Investor 2011 roundtable briefing.
"We are concerned of the medium to long term impact of this earthquake. But the efforts by the Bank of Japan to pump in US$183 billion into the financial system may stem any major sell down in the capital markets and reassures investors," he said. He also said that the CONSTRUCTION industry in Japan is set to be a major gainer after this disaster as the government there starts rebuilding the cities affected by the quake and tsunami.
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