Sakaiya warns of decline in public works next year

Japan Policy & Politics, July 26, 1999

TOKYO, July 21 Kyodo

The head of the Economic Planning Agency (EPA) said Wednesday he is concerned that a plunge in public works spending next year, in reaction to this year's ample expenditures, would block the economy's recovery. Taichi Sakaiya told reporters, "I'm worried there would be a considerable decline (in public works spending) in the January-March and the April-June terms next year" from the current spending levels. "We have to consider how to make up this fall," EPA Director General Sakaiya said after a regular cabinet meeting held in the morning. Sakaiya suggested that the government is considering compiling a second supplementary budget for this fiscal year in a bid to underpin the economy. "It has to count on a financial deficit for raising the funds to prop up the economy," the EPA chief said. Sakaiya expressed a neutral stance regarding the current exchange level of the yen against the U.S. dollar. "The level of the yen is not what will have a serious impact on the Japanese economy," he said. The yen appreciated in Tokyo from the mid-120 to the dollar level Monday to the 119 level Wednesday morning, following rises in overseas trading on Tuesday, when the Tokyo market was closed for a national holiday.