Economic contraction in Japan is an "acceptable" situation, though the pace of shrinking will be a major concern, Economic and Fiscal Policy Minister Heizo Takenaka said on a debate TV program.
"Negative economic growth is something we should live with," said Takenaka in a program shown on government-run Japan Broadcasting Corp. "But the speed of economic shrinking is a warning sign."
The comments from Japan's chief economic planner reflect the diminished expectations of an economy facing its third recession in a decade and government debt that's expected to reach ?666 trillion (US$5.47 trillion), or 130 percent of gross domestic product, by March.
The world's second-biggest economy will shrink between 0.9 percent and 1.2 percent in its fiscal year that ends March 31, the Bank of Japan's nine-member board said in its semiannual forecast today.
Board members expect the economy to shrink as much as 1.1 percent next fiscal year, and predict consumer prices will fall this fiscal year and next.
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