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Japan admits economy 'falling short'

Japan admits economy 'falling short' article image
Japan's Minister for Finance Naoto Kan has admitted that the country will have to battle deflation and unemployment before a full recovery becomes clear. "The economic situation is still severe, falling short of a self-sustained recovery, even though it is beginning to pick up," he reported, as the new government began its first term. "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." Japan announced a fourth stimulus package last month, worth 7.2 trillion yen (AU$86 billion), which was designed to "tackle deflation and make sure the economy will recover,"said Kan. The total package is valued at almost AU$300 billion. The spending will be financed by government bonds rather than tax revenue, with AU$111 billion worth of bonds to be issued.

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