To achieve a long-term solution to the economic crisis, the government must offset the sharp decline in foreign demand by strengthening industries that can generate demand at home, according to economist Nobuo Ikeda, a professor at Jobu University in Gunma Prefecture.
The Bank of Japan stands little chance of stimulating the economy, he says, because the central bank, which has been lowering interest rates to near zero, buying corporate debt and taking other measures for many years, "has run out of options to increase money supply for a short-term solution."
Gross domestic product shrank at an annual 12.7 percent pace in the October-December period, the worst performance since the oil shocks in January-March 1974, the Cabinet Office announced Monday.