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Japan PM launches economic crisis talks

Japan's embattled premier on Monday launched a week of crisis talks on reviving the world's number two economy, which a government report warned remained "in a severe situation."Prime Minister Taro Aso convened a panel of experts to gather ideas for a new stimulus package that, according to media reports, may total about 20 trillion yen (200 billion dollars).

business Updated: Mar 16, 2009 17:29 IST

Japan's embattled premier on Monday launched a week of crisis talks on reviving the world's number two economy, which a government report warned remained "in a severe situation."

Prime Minister Taro Aso convened a panel of experts to gather ideas for a new stimulus package that, according to media reports, may total about 20 trillion yen (200 billion dollars).

Aso, struggling to reverse a slump in his popularity ahead of elections later this year, last week announced plans to put together a third stimulus package to revive the economy, which is now headed into its worst post-war recession.

Finance Minister Kaoru Yosano and 83 experts were set to take part in the talks, which will run until Saturday on themes such as the environment, social security and employment.

The boost would come on top of two earlier stimulus packages worth a total of about 50 trillion yen, including a two-trillion-yen cash handout to the public and other non-spending measures, such as loan guarantees for companies.

The latest package is likely to include fast-tracking express railway construction, earthquake-proofing for school buildings, environmental measures and social welfare programmes, such as care for children and the elderly, reports said.

Yosano has expressed hope that Aso would be able to announce details of the latest package in time for a Group of 20 summit of world leaders on the crisis in London on April 2.

The talks started as the Cabinet Office in its latest monthly report said Japan's economy was still "worsening rapidly" and "in a severe situation" -- the same overall economic assessment as in the previous month.

It was the first time in six months the government left its overall economic assessment unchanged rather than downgrading it.

The March report said corporate profits, exports and industrial output were all "decreasing very substantially," the employment situation was "getting worse rapidly" and private consumption was "decreasing modestly."