Prime Minister Taro Aso's next stimulus package may need to exceed ¥10 trillion to bolster an economy heading for its worst postwar recession, analysts say.
Aso, whose approval rating has plunged ahead of an election that must be called by September, called this month for fresh spending to counter the export-led recession, which threatens to engulf consumers at home as companies fire workers and cut wages. He has already pledged ¥10 trillion since October.
"The domestic economy might really tank and there's basically no way out of it except if the government helps," said Martin Schulz, a senior economist at Fujitsu Research Institute. "It is absolutely necessary for Japan to keep the domestic economy going."
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