"Tokyo Announces Its Stimulus Package;" by Ken Belson; The New York Times; October 17, 2001; Page W1.
A. Summary:.
The Japanese government will spend 1 trillion yen, $8.3 billion, to stimulate economic growth in the remaining fiscal year. The stimulus package is much smaller than expected, and illustrates the difficulties the government is having in steering between urgent demands that it get the runaway budget deficit under control and that it act to keep the economy from sliding further into recession.
The new stimulus package will be only half the size of last year's supplementary budget and another trillion yen will be used to retire old debts. The government is also considering a second spending package to pay for antiterrorism measures.
Analysts say that the plans will do little to turn around an economy that is expected to shrink by 1.5 percent in the current fiscal year, which ends March 31, 2002. Critics say the new plan only keeps the economy from contracting faster than it would have without the plan. .
The Finance Ministry said that the government would take in 1.1 billion yen - $9.1 million - less in tax revenue than it had originally forecast. Japan's bond market reacted positively to the conservative spending plans, pushing the yield on the benchmark 10-year bond down slightly, to 1.355 percent.
B. Brief Analysis:.
This article deals with the continuing struggle of the Japanese government to deal with the recession that Japanese economy has been in throughout most of the 1990s. The government continues to offer conservative responses to the problem with little change - as was noted in the article even this plan only slows the decline of the economy instead of stopping it or even stimulating growth. This has international implications because the Japanese are unable to invest in other countries or expand their own companies, and their domestic market cannot take many imports, which affects the exports of other countries.
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