The Bank of Japan said Friday the economy is plunging drastically, downgrading its assessment for the third month in a row.
"Japan's economic conditions have been deteriorating significantly," the central bank said in a report in Tokyo, using the most pessimistic language to describe conditions since January 1998.
The global slowdown has spurred record declines in exports and factory output in Japan, and the central bank expects the slump to deepen. BOJ Gov. Masaaki Shirakawa and the Policy Board said Thursday they expect gross domestic product to shrink 1.8 percent in the year ending March 31 and fall 2 percent the following year.
Exports fell 35 percent in December, the most on record, from 27 percent in November, a report showed Thursday. Factory output dropped 8.5 percent in November, the most in more than 50 years.