Japanese Finance Minister Kiichi Miyazawa on Tuesday said the economy is in a severe recession and voiced his frustration over the country's doggedly depressed consumer spending. "No matter what I say, the economy is in critical recession," Miyazawa told a lower house budget committee in a remarkable departure from the government line up to now that the economy is on the path to gradual recovery.
"The reality is our household spending is not recovering. Facing such a reality, we just cannot keep saying it will take some time" until the economy recovers, Miyazawa said. "The government needs to do something," he said. The finance minister said capital spending by companies has steadily recovered but the nation's consumer spending remained depressed contrary to his early expectations.
"Capital spending by the private sector has swiftly recovered...But gains in capital activity have yet to trickle down to individual households," he said.
On February 16 the Cabinet Office, formerly known as the Economic Planning Agency, downgraded the government's key economic assessment, but still maintained that the economy was headed for a self-sustaining recovery. "The pace of economic recovery has become more moderate," the Cabinet Office, said in its February report. It added, however that "the move towards self-sustained recovery has continued, as shown by rising corporate profits and business investment." —(AFP)
© Agence France Presse 2000
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