Prime Minister Keizo Obuchi on Friday gave his Cabinet till the end of the month to report on how the 24 trillion yen economic stimulus package announced in November is being implemented.
At a press conference after a Cabinet meeting, Chief Cabinet Secretary Hiromu Nonaka said he wants to thoroughly check how the packages’ measures, included in the supplementary budget for fiscal 1998 and the fiscal 1999 budget, have been put into effect. “If there are problems,” Obuchi was quoted as saying, “we would like to overcome them, and I hope to achieve economic recovery with indomitable resolve.”
Obuchi leaves for the United States at the end of the month for talks with President Bill Clinton and wants to be armed with details on how the measures, such as those to create more jobs, are being carried out by local governments.
His directive came amid lingering speculation that the government may compile a supplementary budget later this year, though Cabinet ministers dismissed this view. “The review is not aimed at drawing up a plan for a future economic stimulus package,” Nonaka said. “We intend to find out how various measures have so far been properly carried out.”
The government already is executing a record 81.86 trillion yen national budget for fiscal 1999. Taichi Sakaiya, director general of the Economic Planning Agency, said the EPA is looking at April 23 or April 24 to file a report on the government’s stimulus package.
The report will spell out whether the largest-ever economic package needs modifications to make it more effective, Sakaiya said, noting that the agency is acting on the instructions of Obuchi. He also said that the government has no plan to take the extra step of buoying the economy with a supplementary budget for fiscal 1999, which began 10 days ago.
Sakaiya said he is quite confident that the government’s positive economic growth target of 0.5 percent for fiscal 1999 can be achieved. The comment came in response to the World Bank’s estimate, released Wednesday, that Japan’s real gross domestic product in calendar 1999 will contract 0.9 percent, a slide from the 0.2 percent real GDP drop it forecasted in December.
Meanwhile, Finance Minister Kiichi Miyazawa also reiterated that the government does not, at present, need to draft a supplementary budget to further spur the economy. “Speaking of fiscal spending, the necessary steps have been included in the extra budget for the last fiscal year and the budget for this fiscal year,” he said. “So I don’t think we should think about additional measures.”
On Thursday’s interest rate cut by the European Central Bank, Miyazawa said the action is appropriate to prevent a downturn in growth in European nations and in the rest of the world. “I think it’s a good thing,” he said, adding that the rate has apparently been reduced to the lowest point it is likely to reach.
The ECB slashed its main lending rate by a larger-than-expected 0.5 percentage point to 2.5 percent. It was the first rate cut since the ECB was launched in January in tandem with the introduction of the euro.
Asked to comment on soaring Tokyo stock prices, Miyazawa said, “I don’t think they have risen at too fast a pace.”