Free Newsletters - Space - Defense - Environment - Energy - Solar - Nuclear
..
. Earth Science News .




POLITICAL ECONOMY
Japan premier unveils $226.5 bn stimulus package
by Staff Writers
Tokyo (AFP) Jan 11, 2013


Japan's new government unveiled a $226.5 billion stimulus plan Friday in the latest bid to boost the world's number three economy, with plans to rebuild disaster-hit areas and beef up the military.

Japanese investors welcomed the news, with the Nikkei index surging to a 22-month high and the yen tumbling, but some analysts questioned its long-term effect and warned it could lead to more misery further down the line.

Prime Minister Shinzo Abe, who came to power in a landslide election victory last month, followed through with one of his key pledges by outlining details of a big-spending plan designed create jobs and end deflation.

"With the measures, we will achieve real GDP growth of two percent and 600,000 jobs will be created," he told a briefing.

Japan's economy shrank by 0.6 percent in 2011. Last year's gross domestic product figures are yet to be released.

"It is crucially important to break out of prolonged deflation and the high yen," he added.

A hawkish Abe also repeated his call for Tokyo and the Bank of Japan to "join hands" on driving growth, comments that have stoked tension between him and BoJ chief Masaaki Shirakawa over perceived threats to its independence.

Abe pledged before the election he would press the BoJ to carry out more aggressive monetary easing and warned that if it did not agree to a two percent inflation target he would change the law.

While the total size of Friday's package came in at 20.2 trillion yen ($226.5 billion), Tokyo's direct spending on economic stimulus and pension financing amounts to about 13 trillion yen, with local governments and the private sector kicking in the rest, Abe said.

Rebuilding disaster-struck areas, making schools and hospitals earthquake resistant, and upgrading ageing infrastructure were among the planned measures.

It will also see 180.5 billion yen spent on missiles, fighter jets and helicopters as Tokyo is embroiled in a bitter territorial row with China over a group of islands in the East China Sea.

Finance Minister Taro Aso told reporters 7.6 trillion out of 13 trillion yen would be financed by new government bonds.

Friday's stimulus is the latest by successive governments who have tried to lift the economy from years of anaemic growth.

Investors welcomed the move, with the Nikkei up 1.5 percent to levels not seen since before the March 2011 tsunami.

The yen slid to 89.35 against the dollar, a far cry from the exporter-squeezing 75 in late 2011.

But some question whether Japan's tattered balance sheet, with debt over twice GDP, can bear more debt.

Abe insisted the package was not a return to form for his Liberal Democratic Party's pork-barrelling ways of the last century.

"There is a suspicion that it is a kind of wasteful spending on white elephant projects that the LDP did in the past. That's wrong," he said.

"Fiscal discipline is quite important. However, without a strong economy... we cannot improve our fiscal health."

Masahiko Hashimoto of Daiwa Institute of Research agreed with Abe, saying a flexible fiscal policy in the short-term would eventually be a boost to fiscal health.

But Taro Saito, senior economist at NLI Research Institute, said a package of this size would have a one-time effect.

"But if it fails to ignite a sustained recovery, Japan could fall into a vicious cycle of needing more stimulus," he said, warning "wasteful spending" could prove problematic.

"If that is the case, it would only have a negative impact on Japan's fiscal health and a limited effect on boosting the economy," he said.

Japan slipped into a huge $2.5 billion current account deficit in November as exports to China and debt-hit Europe slumped, official data showed Friday, marking the second-biggest deficit on record after January 2012.

It was also the first time Japan has logged a current account deficit in any month other than January, when trade tends to slow over New Year holidays.

.


Related Links
The Economy






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





POLITICAL ECONOMY
Steady tide of acquisitions mark new year
Raufoss, Norway (UPI) Jan 8, 2013
Company acquisitions are continually changing the face of national aerospace and defense industries and 2013 is unlikely to be an exception. Notable takeovers announced at 2012 yearend and the start of 2013 involve the Nordic ammunition-maker Nammo, Italian aviation company Avio S.p.A. and U.S. conglomerates General Dynamics and Lockheed Martin. In Europe, the Nammo Group, which ... read more


POLITICAL ECONOMY
EU grants Haiti fresh aid on quake anniversary

Years after quake, Haitian homeless feel abandoned

Obama signs $9.7 bn aid bill for Sandy victims

Obama considers broad arms sales restrictions: report

POLITICAL ECONOMY
How the kilogram has put on weight

Japan to survey Pacific seabed for rare earth

3D printing creates 'virtual' fossil

LEON: the space chip that Europe built

POLITICAL ECONOMY
Interagency Report Published on Information Required for Short-Term Water Management Decisions

Heat-resistant corals provide clues to climate change survival

Baby sharks stay still to avoid being detected by predators

Genetics clues to survival of coral reef

POLITICAL ECONOMY
A new approach to assessing future sea level rise from ice sheets

A New Way to Study Permafrost Soil, Above and Below Ground

Bering Sea study finds prey density more important to predators than biomass

Fiennes sails for Antarctica on first winter crossing bid

POLITICAL ECONOMY
KFC parent company sorry over China chicken scare

Report: World wastes half of its food

Invading species can extinguish native plants despite recent reports

Bugs need symbiotic bacteria to exploit plant seeds

POLITICAL ECONOMY
Malawi floods kill three, displace thousands

Red-dust sunset as west Australia braces for cyclone

Russian volcano erupting with gas, ash

Rains bring flood havoc, drought relief to desert Jordan

POLITICAL ECONOMY
Foreign troops arrive in Mali: witnesses

Zambia bans lion, leopard hunting

No C.Africa deal in sight as rebels demand president quit

NATO says no Mali plans, Compaore urges talks

POLITICAL ECONOMY
Eliminating useless information important to learning, making new memories

Tech world crawling into the crib

Promising compound restores memory loss and reverses symptoms of Alzheimer's

Dopamine-receptor gene variant linked to human longevity




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement