It is too early for Japan to end its massive stimulus spending because the world's second biggest economy is still slowly recovering from a severe recession, the finance minister said Sunday. "We actually want to move to an exit strategy soon but it would make things worse," Finance Minister Naoto Kan said in a programme on the public broadcaster NHK.
"I think it is too early to take steps towards fiscal belt-tightening in the immediate future," he said. Japan's lower house last week passed a record 92.3 trillion yen (1.0 trillion dollar) budget for the year from April that will add to an already enormous mountain of public debt as Tokyo tries to stimulate a recovery.
The Organisation for Economic Co-operation and Development has warned that Japan's public debt, bloated by repeat bouts of stimulus spending, will soar to 200 percent of the country's gross domestic product by 2011. It returned to growth in the second quarter of 2009, but the recovery remains fragile with high public debt, falling consumer prices and weak domestic demand all major concerns for policymakers.