28 Apr 2009

Japan expects slump in economy

9:01 am on 28 April 2009

Japan expects its economy to shrink by 3.3% over the coming year - its worst slump in at least half a century.

The government is preparing to present an economic stimulus plan worth 15.4 trillion yen ($US159 billion) to parliament.

The BBC reports the projected downturn for the 2009 fiscal year would be the worst since Tokyo began measuring growth in 1955. It follows an estimated decline of 3.1% in 2008.

Finance Minister Kaoru Yosano said Japan remains vulnerable to fresh economic turmoil overseas.

The government says the planned stimulus spending plan should boost economic output by 2% this fiscal year.

It will issue a record 10.8 trillion yen in bonds to cover the extra spending, adding to debt pressures.