Japanese Prime Minster Noda attempts to spur economic growth

Japan’s Prime Minister Yoshihiko Noda has ordered his governmental cabinet to create new stimulus measures in a bid to spur economic growth. He is under pressure to lift the world’s third-biggest economy after growth stalled in recent months, growing only 0.3% in the second quarter of the year from the previous three months.

Recently there have been concerns that Japan could slide into a recession as its growth has been damaged by falling demand for its exports caused by a slowdown in key markets such as the USA, the eurozone and China. Domestic consumption in Japan has also slowed. “Considering what the government and the central bank are forecasting, I doubt we can simply stand by and let the economy continue as it is,” said Finance Minister Koriki Jojima.

Mr Noda has ordered the stimulus package to be compiled by next month, but, according to Mr Jojima, the government has not made a decision on how much it will spend. Speculation by the Japanese media suggested that the new measures could include spending on renewable energy, healthcare and agriculture and might total about 1 trillion yen (around £7 billion).

Some have been critical of the vagueness of the plan. Writing for Reuters, Stanley White claimed that Mr Noda had given so few details about the size and contents of the package, that it is “unlikely to ease worries about the faltering economy“. It has also been reported that the proposed package may be motivated by the imminent Japanese elections, and the importance of not appearing complacent to the public about the potential of a recession.

Sources include: BBC News, Reuters, News on Japan

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