The Organization for Economic Cooperation and Development on Monday revised downward its forecast for Japan’s economic growth in 1998 by 1.2 percentage points to 1.7 percent, partly because of the worsening problems in the financial sector, the organization said.

“Tensions in financial markets, which began in Thailand in mid-1997, spread to a number of other countries in East Asia, including Japan and South Korea, in the following few months,” the organization said in its latest economic outlook report, which is issued twice a year. “In Japan, where the expansion that started in 1996 faltered during 1997, the recovery has become increasingly fragile.”

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