Statement by Prime Minister Junichiro Koizumi at the Cabinet Meeting
(On the Economic and Fiscal Policy Management in Coming Few Months)
November 26, 2001
1. As a result of the recent series of terrorist attacks in the United States, the risk of a global economic recession has heightened and the Japanese economy is deteriorating further. Although measures in the form of the Advanced-Reform Program and the Supplementary Budget for fiscal 2001 have already been formulated, we shall prepare an Immediate Economic Action Package and the second Supplementary Budget for fiscal 2001, based on the current severe economic climate, in order to avoid falling into a deflationary spiral while further accelerating structural reforms.
2. The projects to be included in the Immediate Economic Action Package are those which are expected to contribute to the acceleration of structural reform and have a positive effect in economic revitalization. Specifically, the projects belong to either of the seven priority areas (the environment, the declining birth rate and aging society, regional vitalization, urban renaissance, promotion of science and technology, human resources development and education, and IT) and are those:
1. That contribute to the creation of private sector investment, and to an increase in employment opportunities; and
2. That can be implemented promptly, are expected to have an immediate effect on the economy, and need to be implemented as a matter of urgency.
3. With regard to the second Supplementary Budget, considering the current fiscal situation, and under the policy that "government bond issuance should be less than 30 trillion yen," rather than finance it by an easy increase of government bond issuance, we will provide a total of 2.5 trillion yen in non-interest loans of national expenditure, consisting of approximately 1.5 trillion yen in general public works expenditure, and approximately 1 trillion yen in facility expenditures through the implementation of a special measure, "Public Investment to Promote Reform", which makes maximum use of government reserve funds. Given the characteristics of fiscal resources, operating expenditures will not be included, and this Program will not be applied to loans to special public institutions.
4. The Immediate Economic Action Package will be formulated by the Minister of State for Economic and Fiscal Policy.
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