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Japanese PM wants to spend US$99b to rescue economy

JAPANESE Prime Minister Taro Aso has ordered more than 10 trillion yen (US$99 billion) in fresh spending to rescue the world's second-biggest economy from its deepest recession since World War II.

The figure amounts to more than 2 percent of Japan's gross domestic product, Finance Minister Kaoru Yosano said yesterday after meeting with Aso.

Aso said last week at the G20 summit in London that he intended to put together a new stimulus package, on top of 12 trillion yen in fiscal steps the government has implemented since last year.

The latest package will include measures to help contract workers and small businesses, boost regional economies, expand "green" technologies and support elderly care, said Ministry of Finance spokesman Yasunaga Matsuki.

Officials aim to finalize details of the latest package by Friday and then submit the extra budget proposal to parliament soon after, Matsuki said.

Japan has been hit particularly hard by the global slowdown, which has sapped foreign sales of its cars and gadgets. Exporters including Toyota Motor Corp and Sony Corp have slashed production and jobs in response.

Japan's gross domestic product shrank by an alarming 12.1 percent annual rate in the October-December period.

More economic woes

The government's latest spending initiative comes on the heels of further signs of economic deterioration.

Data for February released last week showed that industrial production tumbled, household spending fell sharply, and the country's unemployment rate rose to a three-year high of 4.4 percent. A key central bank survey showed that confidence among big manufacturers plunged to its lowest point ever.

Lawmakers last month passed a record 88.5 trillion yen budget for the fiscal year that started April 1, which included parts of Aso's two previous stimulus packages.

Officials yesterday declined to comment on where they would find extra money, though Aso said recently he would turn to issuing bonds if needed. Japan's massive public debt now runs at 170 percent of GDP - the highest level among industrialized economies.


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