The economic outlook for Japan in 2008 is not bright. The Japanese economy faces a variety of factors that are likely to place a drag on its growth, such as the steep rises in oil prices and the expected slowdown of the U.S. economy due to the subprime mortgage crisis. In fact, the Organization for Economic Cooperation and Development has predicted that Japan's economy would grow by 1.9 percent in 2007 and 1.6 percent in 2008, downgrading its previous growth forecasts of 2.4 percent for 2007 and 2.1 percent for 2008.