Japan said yesterday it expects the economy to shrink 3.3 percent over the coming year, its worst slump in at least half a century, as the government presses ahead with a record stimulus package.
The projected downturn in fiscal year 2009, which began this month, would be the worst since Tokyo began measuring growth in 1955, and follows an estimated decline of 3.1 percent in fiscal 2008, the government said.
Finance Minister Kaoru Yosano said the economy had continued to worsen rapidly since late last year.
“Against the backdrop of a global recession, exports and production have fallen sharply while employment is deteriorating rapidly,” Yosano said in parliament.
“The financial climate, such as corporate fund-raising, is also severe. Our country is surely in a state that can be called an economic crisis,” he said.
The economy began shrinking in the second quarter of 2007 and suffered an annualized contraction of 12.1 percent in the last three months of last year as the global downturn crushed exports, the country’s main growth engine.
The Japanese economy probably shrank at an annualized pace of 14 percent in the fiscal fourth quarter to last month, the Cabinet Office estimated, as it tore up its previous forecast for zero growth in the coming year.
The projected contraction in fiscal 2009 would surpass the 1.5 percent drop seen in 1998 during Japan’s so-called “lost decade” of recession and deflation.
The bleak outlook comes despite a planned ¥15.4 trillion (US$150 billion) stimulus spending plan that the government says should boost economic output by two percent this fiscal year.
Yosano said that Japan needed to reduce its dependency on foreign demand.
“In compiling the economic package, we have strictly selected policies that are necessary to support the economy and would enhance future growth power,” he said, citing measures to create jobs and investment in green technologies.
The government will issue ¥10.8 trillion in bonds to cover the extra spending, lifting Japan’s annual issuance to a record ¥44.1 trillion, adding to pressure on the country’s debt-laden public coffers.
Yosano vowed to strive for fiscal discipline for the medium term while saying it was “a common recognition in the international community” that increased public spending was necessary to overcome the current crisis.
While the government’s forecasts are bleak, recent data have sparked hopes that the slump in the Japanese economy may be easing, with exports showing signs of bottoming out and machinery orders unexpectedly rebounding.
Analysts say figures to be released this week may show that factory output in Japan picked up for the first time in six months last month.
Consumer spending is expected to remain sluggish and there are growing worries about unemployment, which analysts warn could rise above its post-war high of 5.5 percent because of the current slump.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
PARTNERSHIPS: TSMC said it has been working with multiple memorychip makers for more than two years to provide a full spectrum of solutions to address AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has been collaborating with multiple memorychip makers in high-bandwidth memory (HBM) used in artificial intelligence (AI) applications for more than two years, refuting South Korean media report's about an unprecedented partnership with Samsung Electronics Co. As Samsung is competing with TSMC for a bigger foundry business, any cooperation between the two technology heavyweights would catch the eyes of investors and experts in the semiconductor industry. “We have been working with memory partners, including Micron, Samsung Memory and SK Hynix, on HBM solutions for more than two years, aiming to advance 3D integrated circuit