Share

Japan's recovery fragile: FM

Tokyo - The world's second-largest economy is recovering but Japan still faces tough challenges, led by the twin threats of deflation and unemployment, the finance minister said on Monday.

"The economic situation is still severe, falling short of a self-sustained recovery, even though it is beginning to pick up," newly-appointed Naoto Kan said at the start of a 150-day parliament session.

"Looking ahead, there are the risks of a further worsening of the employment situation and deflation, and the foundation of a strong, private demand-led recovery is still fragile."

Asia's top economy plunged into deep recession in 2008 as the global downturn sharply cut into its exports, but it grew at a modest 1.3% on an annualised basis in the July-September quarter.

Kan, referring to a stimulus package announced last month - Japan's fourth since the global economic crisis hit - said: "The government will tackle deflation and make sure the economy will recover."

The centre-left government submitted a bill for ¥7.2 trillion ($79.1bn) in spending as part of the package announced last month which it says is worth a total of $274bn.

To help finance the package and other spending, the government plans to issue new bonds worth ¥9.342 trillion ($102.6bn), Kan said.

Japan's public debt is around 180% of gross domestic product, largely due to massive spending during the economic "lost decade" of the 1990s.

Kan's predecessor Hirohisa Fujii, who stepped down this month citing health problems, has warned that "Japan's fiscal situation is serious".

Japan's public debt this fiscal year will reach ¥53.5 trillion, topping annual tax revenue for the first time since 1946, the government has said.

Kan said that more than 52% of public spending will be financed through bond issues rather than tax revenues.

Unemployment climbed to 5.2% in November from 5.1% in October, worsening for the first time in four months. Core consumer prices fell 1.7% in November from a year earlier, the ninth straight monthly drop.

- AFP

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.38
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders