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Japan may need more spending for economy-minister

Published 02/07/2009, 09:35 PM
Updated 02/07/2009, 09:40 PM

(For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, Feb 8 (Reuters) - Japan may need to consider additional spending to support its economy besides an already planned stimulus programme of $130 billion as damage from the global financial crisis grows, Economics Minister Kaoru Yosano said on Sunday.

"The situation is rapidly changing, and it's changing due to factors the Japanese government cannot control," Yosano said in a television programme, referring to weakening global growth and its impact on Japan's export-reliant economy.

"I think it would be wise" to examine further spending to support the economy, he said.

The remarks came ahead of the Feb. 16 release of fourth-quarter gross domestic product data, which is expected to show the world's second-largest economy suffered its biggest contraction since 1974 in the final three months of last year. [ID:nT303524]

Parliament is currently debating the government's 88.5 trillion yen budget for the fiscal year starting in April, the nation's biggest ever.

That budget, along with two other extra budgets for the current year, will finance 12 trillion yen ($130.5 billion) in fiscal stimulus programmes, which amounts to more than 2 percent of Japan's GDP. [ID:nT293157]

The global economic slump has virtually frozen Japanese exports and production of cars and electronics, and its economy is seen headed for its longest recession in modern times.

Japanese industrial production fell a record 9.6 percent in December, the jobless rate rose to 4.4 percent and household spending slid much more than expected -- 4.6 percent from a year earlier. (Reporting by Leika Kihara; Editing by Kim Coghill)

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