Business | Economy
Japan's budget to focus on jobs and growth
Expansion of employment will help the economy increase and improve social security, Prime Minister says
- Bloomberg
- Published: 00:00 July 31, 2010
- Osaka, Japan's second-biggest financial centre after Tokyo. Consumer prices excluding fresh food fell one per cent in June from a year earlier.
- Image Credit: Bloomberg
Tokyo: Japan's Prime Minister Naoto Kan said his focus for next year's budget will be job creation and measures to stimulate growth after the nation's unemployment rate unexpectedly rose for a fourth month.
"I want to attach importance to employment and economic growth in forming the budget," Kan said at a news briefing in Tokyo yesterday. "Expansion of employment will help the economy grow and improve social security."
Deflation
Lawmakers from Kan's ruling Democratic Party of Japan (DPJ) earlier yesterday pressed him to shift the focus of economic policy to growth from curbing what is the world's largest public debt. They also called for the government to put pressure on the central bank to do more to tackle deflation.
Kan said he will seek job growth in social welfare and environmental areas, while keeping his pledge to reduce the nation's debt burden. The jobless rate climbed to a seven-month high of 5.3 per cent in June, the government said yesterday.
"No matter who is the prime minister and which party is in power, fiscal rehabilitation is an unavoidable, top agenda item," Kan said. "I'll continue to work resolutely on debt reduction."
Economic and Fiscal Policy Minister Satoshi Arai said the central bank and government are working together to overcome falling prices, declining to comment on an inflation target. Deflation is easing "little by little," he said.
Consumer prices excluding fresh food fell one per cent in June from a year earlier, the 16th straight decline, government figures showed yesterday. Industrial production slid 1.5 per cent from May, the most since February 2009.
A DPJ group led by Jin Matsubara yesterday presented a list of proposals to Finance Minister Yoshihiko Noda in Tokyo. These included pushing the Bank of Japan to buy long-term government bonds and follow a policy of setting an inflation target of two per cent to three per cent.
Discontent within the DPJ intensified after it lost control of the less-powerful upper house in an election earlier this month, in part because Kan raised the prospect of an increase in Japan's five per cent sales tax to reduce debt. At least three DPJ lawmakers called for Kan's resignation on Thursday.
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