Fukuda orders stimulus package

Aug. 4, 2008 at 6:54 AM
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TOKYO, Aug. 4 (UPI) -- Japanese Prime Minister Yasuo Fukuda, faced with economic slowdown amid rising oil and food prices, Monday ordered an economic stimulus package.

He asked Economic and Fiscal Policy Minister Kaoru Yosano to come up with the package by the middle of this month.

Yosano, who said if might be difficult to secure additional funding for the package in the current budget, may propose a bill for a supplementary budget at an extraordinary parliamentary session in the fall, Kyodo news service quoted government sources as saying.

Yosano said the package will reflect Fukuda's policies announced last Friday, which will include enhancing farm productivity and increasing research on energy conservation measures.

The package will propose steps to support smaller businesses affected by rising crude prices and streamline the distribution system of agricultural products, the report said.

Earlier this month, the government lowered its fiscal 2008 real growth forecast to 1.3 percent from 2 percent. Soaring oil prices, U.S. economic slowdown and the yen's appreciation against major currencies were cited as the reasons.

The government also cut the nominal economic growth rate for the year to 0.3 percent from the 2.1 percent forecast in January. Deflationary pressures generally tend to push nominal growth rates below real growth rates.

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