'Worst economic crisis in the postwar era'

"This is the worst economic crisis in the postwar era," Yosano was quoted as saying at a news conference on Monday.

The economic and fiscal policy minister said that the Japanese economy, largely dependent on exports of autos and electronic products, has been hard hit since last autumn by "the steep downturn" in consumer spending and fresh investment in such major markets as the United States and Europe.

The "terrific slump in exports" is behind the shrinkage in Japan's GDP for the fourth quarter of 2008, he added.

Yosano, along with Chief Cabinet Secretary Takeo Kawamura, who told a separate press conference that the unprecedented economic crisis in 100 years has become a reality, believed that the early passage at the Diet and implementation of bills related to the second supplementary budget for fiscal 2008 and the state budget for fiscal 2009 will contribute greatly to tide Japan over the adverse economic conditions.

The "biggest economic stimulus measure" would be the implementation of the extra budget and fiscal 2009 budget, said Kawamura.

He said that the Japanese economy is hard hit due to its export-oriented nature which has made Japan especially vulnerable to the recent steep appreciation of the yen.

It is imperative to take measures to boost domestic demand, Kawamura said.

Favorable exchange rates, overseas investment and demand, and old industry such as steel, cars and chemicals, which are believed to be the three main pillars that lifted Japan out of the so-called "lost decade" of the 1990s, had crumbled, Martin Schulz, an economist at Fujitsu Research Institute in Tokyo, was quoted by media as saying.

He said that the recovery was built on a major global bubble and thus was unsustainable.

Now Japan's economy is "paying the price," he said.

(Xinhua News Agency February 16, 2009)