Fiscal seppuku?

4 Aug 2008 By Martin Hutchinson

The prime minister s call for a stimulus package carries ominous echoes of Japan s 1990s public spending. Rising imported commodity costs have pushed the country towards recession, so reducing them would help. That calls for higher interest rates, not fiscal stimulus.

This content is for Subscribers only

Context News

Japanese prime minister Yasuo Fukuda said on August 4 that he has appointed his new economics minister, Kaoru Yosano, to work on a fiscal stimulus package to prevent the Japanese economy falling into recession. His Liberal Democratic Party faces an election by September 2009.

Japan's gross domestic product rose 1.3% in the year to March 2008. According to a survey by the Economist, it is expected to grow 1.4% in 2008 and 1.3% in 2009. Industrial production fell 2% in June; it was up 0.2% in the year to June, but fell in both the first and second quarters of 2008. Consumer price inflation was 2.0% in the year to June. Japan's current account surplus was 4.1% of GDP in the year to June, and its budget deficit is expected to be 2.7% of GDP in 2008.

Context News

Email a friend

Please complete the form below.

Required fields *