Posted on 18 Dec 2007
'08 economic growth-Japan
The economy will probably keep expanding in 2008, though
higher oil prices and a slowdown in the United States are risks to growth,
economic and fiscal policy minister Hiroko Ota said Monday.
"Japan's
recovery will probably continue next year," Ota said, though she added
that the U.S. housing
recession could stunt consumer spending in Japan's largest export market.
Many Japanese companies are unable to pass on higher costs
of energy and raw materials to clients, crimping profits and preventing them
from raising wages, Ota said.
She said Japan
should recover from a slump in housing investment triggered by a legal change
that made it more difficult to obtain building permits. "The
implementation of the housing rule change was a case of bad preparation, but it
doesn't represent a trend," Ota said.
She also commented on fiscal policy, saying Prime Minister
Yasuo Fukuda aims to cut spending and is committed to eliminating the deficit
by March 2012. Still, she added, taxes will need to be raised "sooner or
later" to fund swelling welfare costs.
