Japans finance minister said Sunday that the government may have to spend a further 200 billion dollars to revive the stricken economy, which he warned faced another sharp contraction this quarter.
The comments suggest that Tokyo plans to dig deep into the public coffers for a third stimulus package currently being put together to battle what is feared to be Japans worst recession since World War II.
"Its not a situation where new fiscal spending of two to three trillion (yen) would be enough as a remedy," Finance Minister Kaoru Yosano told a television news programme.
A figure of around 20 trillion yen (208 billion dollars) is "not out of line with my hunch," he said, but added that the size of the package had not yet been decided. Prime Minister Taro Aso last week ordered another stimulus to pump up Asias largest economy, following two earlier packages worth a total of about 50 trillion yen, including some non-spending measures such as loan guarantees.
Japans economy logged its worst performance in almost 35 years in the last quarter of 2008, contracting at an annualised pace of 12.1 percent.
The first quarter of 2009 may turn out to be just as bad, Yosano warned.
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