The Bank of Japan is expected to forecast economic growth of around 2 percent in fiscal 2012. The central bank will present its latest estimate early next week.

The central bank is likely to say that the economy will begin to recover in fiscal 2012 starting in April, with moderate growth due to rising demand from reconstruction of the northeast after the 2011 disaster.

But the bank is expected to say that credit problems in Europe will continue to be a headwind against the economy.

For fiscal 2011 that ends in March, the economy is expected to fall into negative territory from the current estimate of 0.3 percent growth.

The downgrade is a result of falling production and exports after the March disaster, and the global slowdown caused by Europe's debt crisis.

The central bank will announce its latest forecast at a two-day policy meeting starting on Monday.

Source: http://www3.nhk.or.jp/daily/english/20120119_17.html

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