18 October 2001, 14:20 Fukuda confirms Shiokawa's view economy may shrink in FY 2001
TOKYO, Oct. 18 (Kyodo) - Chief Cabinet Secretary Yasuo Fukuda
suggested Thursday that the economy could shrink in fiscal 2001 as
the price for maintaining the policy goal of limiting the year's
bond issues to 30 trillion yen.
The government's top spokesman was responding to reporters'
questions on a remark Thursday morning by Finance Minister Masajuro
Shiokawa that the economy could contract in fiscal 2001.
"What is at stake is whether the government should stick to the
30 trillion yen line," Fukuda told a news conference.
"It is a significant ideal to contain the scale (of the net
bond issue sum) firmly without resorting to further fiscal stimulus
measures," he said.
Earlier in the day, the finance minister was quoted as telling a
key Liberal Democratic Party (LDP) council meeting, "I cannot
guarantee that the economy will not contract."
The remark at the LDP Policy Deliberation Commission has
deepened concern that Japan may sink into deeper economic doldrums
and not be able to keep its international promise to prevent the
economy from contracting in the year through next March 31.
Earlier this week, the Finance Ministry proposed limiting the
size of a supplementary budget for fiscal 2001 to 2.7 trillion yen,
of which 1.7 trillion yen would be funded with additional bond
issues.
At Thursday's LDP commission meeting, legislators dismissed the
proposed size of the auxiliary budget as too small to revive the
anemic economy.
Since the regular fiscal 2001 budget enacted earlier this year
calls for floating a net 28.3 trillion yen in bonds, it has left
the government with room to issue 1.7 trillion yen in additional
bonds without overstepping the 30 trillion yen boundary.
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