All Japan news has downgraded its economic expectations for next fiscal year, to 2.2 percent, due to the record-strong yen, the effect of the natural disasters and the financial crisis which affects Europe, the government said.
The previous forecast indicated a growth between 2.7 and 2.9 percent.
Unemployment is expected to stay around 4.5 percent in fiscal 2011 and 4.3 percent in fiscal 2012.
The government said that the earthquake and tsunami have seriously damaged the national economy for the current fiscal year, but that the reaction was fast. "The economy picked up after the supply chain rebuilt itself quickly.
”But after summer, the recovery has slowed due to a quickly rising yen and the global economic slowdown brought about by the European sovereign debt crisis," it stated.
The strong yen has affected All Japan news’s export-led economy.
The officials expressed however optimism in relation to the European debt crisis, saying that there are good chances that it eases next year, allowing the pressure on the global economic growth to lower.