TOKYO: The Japanese parliament Friday passed an extra budget worth $58 billion to cover a new stimulus package aimed at averting the threat of a “double-dip” recession. The powerful lower house, dominated by Prime Minister Naoto Kan's ruling Democratic Party of Japan, overruled a vote in the opposition-controlled upper house earlier Friday against the budget, which amounts to 4.85 trillion yen. The stimulus package, designed to ease concerns over deflation and a strong yen, includes job programs, welfare spending and schemes to help small businesses and infrastructure. The stimulus was the Kan administration's second since it came to power. Kan took office in June promising to slash spending and work towards cutting its massive public debt accounting for nearly 200 percent of gross domestic product by avoiding issuing new bonds to pay for stimulus measures. But the state of Japan's economy has complicated Kan's ambitions. Exports growth is slowing, crippling deflation persists and the government has downgraded its view of the economy for the first time since February 2009. The nation's consumer prices slid for the 20th straight month in October, the government said Friday, a day after it said exports grew at their slowest pace of the year last month. The figures underscored fears of a delayed exit from crippling deflation as Japan's economic recovery loses steam. The country has been stuck in a deflationary spiral since its asset bubble burst in the early 1990s, and consumer spending has never fully recovered to become a major driver of growth. Thursday's exports data provided further evidence that the country's trade-reliant recovery is ebbing. – Agence France
