9 Feb 2009

More govt spending may be needed in Japan - minister

7:41 am on 9 February 2009

A Cabinet minister in Japan says more spending may be needed to support the economy as damage from the global financial crisis grows.

A stimulus programme of $US130 billion is already planned.

Economics Minister Kaoru Yosano said in a television programme on Sunday the situation was rapidly changing due to factors the government could not control.

Mr Yosano said he thought "it would be wise" to examine further spending to support the economy.

Data on the fourth-quarter gross domestic product is due to be issued on 16 February. It is expected to show the economy underwent its biggest contraction since 1974 in the final three months of last year.

Parliament is currently debating an 88.5 trillion yen budget for the financial year starting in April.

The budget, and two other extra budgets for the current year, will finance 12 trillion yen ($US130.5 billion) in stimulus programmes. They amount to more than 2% of GDP.

Industrial production in Japan fell a record 9.6% in December, the jobless rate rose to 4.4% and household spending was down 4.6% from a year earlier - much more than expected.