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Current headwinds to global growth story temporary: Fitch

On Japan, report says in the aftermath of the March 11 earthquake and tsunami, the Japanese first GDP numbers declined sharply in Q1, prompting Fitch to revise down its 2011 full-year forecast to a paltry 0.5, from 0.9 percent. Agency expects a V-shaped recovery to emerge during the second half of the year in the world's third largest economy, driven by a resumption of exports and restocking. On the lingering Eurozone sovereign debt crisis, Fitch says the region has outperformed its growth projections in Q1, pulled up by continued robust growth in Germany. The agency projects the Euro area GDP growth at 1.7 percent for 2011, up from 1.2 percent previously, and 1.8 percent for 2012. About Britain, the report says the recovery is still very anaemic. "The weaker-than-expected Q1 performance, with consumption and investment both declining, serves as reminder of how anaemic the recovery is, with growth still weighed down by household and financial sector deleveraging," the report says and projects a GDP growth of just 1.4 percent, down from 1.6 percent this year. However, it maintains its 2012 growth projection at 1.7 percent for Britain. Significantly, Germany maintained its role as the main engine behind the euro area recovery, while other major Euro area economies also performed in line with the projection.Despite the headwinds of Euro area-wide fiscal consolidation and the lingering uncertainty regarding the Euro area debt crisis, private consumption rose 0.3 percent for a second consecutive quarter, notes the report. But the agency expects a more moderate pace of growth for the remainder of 2011, partly reflecting the likely impact of austerity measures across Europe, the effect of higher oil prices, and slightly less accommodative ECB policy. Germany's real GDP growth in Q1 was surprisingly robust, up 1.5 percent quarter on quarter and over two times Fitch's projection of 0.6 percent. Growth was broad-based, with the largest upside coming from capital investment, which rose 5 percent in Q1 from a negative 0.1 percent in Q4 of 10.