Aso 'very worried' about economy, seeks early budget passage+

TOKYO, Feb. 16 Kyodo - Prime Minister Taro Aso said Monday he is ''very concerned'' about the Japanese economy, which recorded its sharpest contraction in 35 years in the October-December quarter of 2008, and called for an early implementation of budgetary measures to support the economy.

The dismal gross domestic product data prompted government officials and ruling
coalition lawmakers to study the possibility of a fresh economic stimulus
package, on top of already announced steps worth a total of 75 trillion yen.
But a large-scale stimulus package would require the issuance of fresh
deficit-covering bonds, exacerbating the nation's fiscal position which is
already the worst among developed countries.
The balance of debts issued by the central and local governments is forecast to
stand at 157.5 percent of Japan's GDP at the end of March 2010. Depending on
the size of the envisioned stimulus, new government bond issuance could top a
record 37.5 trillion yen recorded in fiscal 1999.
Calling the annualized real 12.7 percent and nominal 6.6 percent negative
growth in the fourth quarter ''a big minus figure,'' Aso told reporters he has
instructed the government to swiftly carry out stimulus steps such as making
school buildings quake resistant.
The prime minister said the financial sector in Japan has suffered less damage
than in other countries and Japanese banks and securities firms will ''not
likely go bust.''
But he said, ''We badly lack domestic demand. Since we have been dependent on
external demand, (GDP) logged significant negative growth.''
Earlier in the day, Economic and Fiscal Policy Minister Kaoru Yosano said that
Japan is facing its worst economic crisis since the end of World War II.
When asked about the possibility of the government compiling a new economic
stimulus package in the near future, Yosano said ''broad-ranging discussions
are necessary first.''
''After seeing this level (of GDP), it is our duty to think of various policy
options,'' he added.
Echoing Aso, Yosano called for early Diet passage of bills related to the
second supplementary budget for fiscal 2008 so that the budget can be
implemented as well as early clearance of the state budget for fiscal 2009 to
address the severe conditions.
Separately, former Prime Minister Yoshiro Mori said on a television program
that he believes it will be ''unavoidable'' for the government to compile an
extra budget for fiscal 2009 to buoy the economy. ''It is a common-sense
view,'' he said.
Fujio Mitarai, chairman of the Japan Business Federation, the country's most
powerful business lobby, issued a statement also urging the government to
compile a supplementary budget for fiscal 2009.
A senior member of the ruling Liberal Democratic Party's Policy Research
Council said the economy is ''severely worsening'' and that the party will
start preparing for an additional economic package.
Meanwhile, Yukio Hatoyama, the secretary general of the main opposition
Democratic Party of Japan, criticized the ruling coalition led by the LDP as a
''do-nothing'' government that is responsible for the steep downturn in Japan's
economy.
A Finance Ministry official said that if the government compiles an extra
budget for fiscal 2009, it will be drafted around May in view of various
schedules.
==Kyodo
2009-02-16 23:27:19