Prime Minister Taro Aso's record stimulus plan will only provide temporary relief as the country heads for its worst postwar recession, economists said.
Morgan Stanley, Nikko Citigroup Ltd. and Macquarie Securities Ltd. said the economy will shrink less than predicted in the year ending next March, after Aso last week unveiled his ¥15.4 trillion package.
The plan, which focuses on jobs, green technology and health care, brings total stimulus since Aso took office in September to ¥25 trillion, or more than 5 percent of gross domestic product. Should global demand fail to pick up, the government may be forced to spend even more to sustain a recovery.