By Stephen Cannon, BridgeNews
Tokyo--Jan. 12--International Monetary Fund Managing Director Horst Koehler told the Japan's Finance Minister Kiichi Miyazawa Friday that despite sluggish personal consumption in Japan, "there's no need to be pessimistic," about the future of Japan's economy in particular, and the various Asian economies in general, according to a Ministry of Finance official.
* * * Miyazawa told Koehler that he was surprised to hear that the IMF predicted that Japan's unemployment rate would top 5% in 2001 according to the IMF September World Economic Outlook, the official said.
Miyazawa explained to Koehler that the business climate in Japan has been improving, but that personal consumption still lags due to job concerns fueled by high level corporate restructuring, a bureaucrat said while briefing reporters after the 45-minute bilateral meeting.
Miyazawa also told Koehler that Japan's 83-trillion yen fiscal 2001 (April-March) budget "isn't a start of fiscal debt reduction," and that it is intended to stimulate the economy, the official said.
Miyazawa also told Koehler that the slowdown of the U.S. economy will likely impact on Japan and Asia, according to the official.
Koehler didn't make any specific comments on Japan's economy, or give any advice on how to manage monetary or fiscal policy, the official said. Personal consumption composes 55% of Japan's gross domestic product and stable growth is generally seen as impossible until it recovers.
Koehler offered his verbal support for the Chiang Mai Initiative to promote currency swap and repurchase agreements as a measure to prevent currency crises in the future, and added that he believes that regional cooperation can contribute to global stability.
This is Miyazawa's second meeting with Koehler. He first met Koehler at the September Group of Seven nations finance ministers and central bankers meeting in Prague. End
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