Japan Says Economy Is in a ‘Severe’ State, Lowers Assessment

[Coventina]

Source: Bloomberg

Feb. 19 (Bloomberg) -- The Japanese government lowered its assessment of the economy for a fifth month after gross domestic product contracted at the fastest pace in almost 35 years.

“The economy is worsening rapidly,” the Cabinet Office said in a report for February in Tokyo today, adding that conditions are “severe.”

The world’s second-largest economy shrank at the steepest pace since the 1974 oil shock last quarter and economists expect the nation to post a record contraction in the year starting April 1. Economic and Fiscal Policy Minister Kaoru Yosano yesterday said Japan is at risk of “falling apart.”

The government hasn’t cut its assessment for five consecutive months since June 2001.



Read more: http://www.bloomberg.com/apps/news?pid=20601101&sid=av9g99DcbWlA&refer=japan

[psychopomp]

1. Looks like another year of belt tightening

At least Japanese people have money stashed away; the problem is getting them to spend it.

The best the government can do is offer people free money in the form of a two hundred dollar one-time handover of cash. It'll just be more money squirreled away into the walls of their homes.