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Wan LixinOpinion deputy editor of Shanghai Daily
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Japan's economy needs US$208b stimulus plan
Source: Agencies |
March 23, 2009, Monday
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Print Edition
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JAPAN'S finance minister said yesterday that aggressive public spending would be needed on a scale of possibly 20 trillion yen (US$208 billion) to wrest the economy out of a painful recession.
Finance Minister Kaoru Yosano, who also serves as financial services minister, acknowledged the government forecast for flat growth for fiscal 2009, ending on March 31, 2010, would probably have to be revised soon to account for the deep contraction seen in recent months.
Japan's economy has been battered by the plunge in exports that continues unabated since the United States financial crisis hit last year. The International Monetary Fund is expecting the Japanese economy to fall 5.8 percent for the 2009 calendar year.
Japan has said the economy contracted at an annual pace of 12.1 percent for the October-December quarter. Data shows the slowdown is dragging into this year.
"Unless there is considerable recovery in the latter half, it would be hard to keep it within the forecast," Yosano said on a nationally televised news program on TV Asahi.
Yosano stressed the amount of spending wasn't decided yet and experts need more data to decide on the right allocation, including where to spend the money. The effort will also need to be discussed in Parliament, he said.
But Yosano said the numbers being tossed around in recent Japanese media reports of 2 trillion yen or 3 trillion yen for the spending package weren't enough to address the growing social woes such as joblessness.
"That is not enough to cope with what is happening in our society or is about to happen," he said. "Speaking from a gut level feeling, 20 trillion yen is a good number."
Japan's unemployment rate stood at 4.1 percent in January, relatively high for a nation that has valued stable employment for decades.
Finance Minister Kaoru Yosano, who also serves as financial services minister, acknowledged the government forecast for flat growth for fiscal 2009, ending on March 31, 2010, would probably have to be revised soon to account for the deep contraction seen in recent months.
Japan's economy has been battered by the plunge in exports that continues unabated since the United States financial crisis hit last year. The International Monetary Fund is expecting the Japanese economy to fall 5.8 percent for the 2009 calendar year.
Japan has said the economy contracted at an annual pace of 12.1 percent for the October-December quarter. Data shows the slowdown is dragging into this year.
"Unless there is considerable recovery in the latter half, it would be hard to keep it within the forecast," Yosano said on a nationally televised news program on TV Asahi.
Yosano stressed the amount of spending wasn't decided yet and experts need more data to decide on the right allocation, including where to spend the money. The effort will also need to be discussed in Parliament, he said.
But Yosano said the numbers being tossed around in recent Japanese media reports of 2 trillion yen or 3 trillion yen for the spending package weren't enough to address the growing social woes such as joblessness.
"That is not enough to cope with what is happening in our society or is about to happen," he said. "Speaking from a gut level feeling, 20 trillion yen is a good number."
Japan's unemployment rate stood at 4.1 percent in January, relatively high for a nation that has valued stable employment for decades.
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