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Tuesday, 22nd June 2010
In Business In Japan,

Japanese prime minister outlines debt reduction strategy

The Japanese government has outlined plans to rein in the country's national debt and also revealed it expects the economy to grow by nearly double its original forecast for the year to March 2011.

Prime minister Naoto Jan and his cabinet office have made fiscal reform one of their main priorities, with Japan's national debt the highest of any industrialised nation.

As well as addressing plans to reduce the country's debt problems, the cabinet also revealed that economic growth will be nearly twice as strong as first thought.

The government claims that the economy will expand by 2.6 per cent in the year to March 2011, compared to an earlier estimate of 1.4 per cent.

A combination of fiscal stimulus measures, increased business profitability and a healthier employment market means the outlook is positive for the nation.

"If this cycle continues, Japan's economy is expected to go on a track towards an autonomous recovery," the cabinet office stated.

The Bank of Japan recently announced a loan scheme whereby it would offer $33 billion (£22.3 billion) to commercial banks to pass on to small businesses which are struggling in the current financial climate.

Written by Kimberley Homer