Japan's Housing Slump Threatens Growth, Ministers Say

Japan's worst housing slump in four decades and rising oil prices threaten growth in the world's second-largest economy, Cabinet ministers said.

``There is concern that a decline in housing investment will become a factor pushing down gross domestic product,'' Economic and Fiscal Policy Minister Hiroko Ota said in Tokyo today. ``I'm more focused on the downside risks to the economy.''

Housing starts fell 44 percent in September and 43.3 percent in August because of stricter rules for obtaining building permits. The government this week said it would relax the regulations after industry criticism that they were too onerous.

``We've heard that the Land Ministry has taken some measures, but there will be some impact in any case,'' Finance Minister Fukushiro Nukaga told reporters.

The Bank of Japan this week cut its economic growth forecast to 1.8 percent from 2.1 percent for the year ending March, in part because of the drop in construction activity.

Credit Suisse Group today said the economy will expand 1.3 percent in the period, slower than the 1.7 percent predicted last month and 2.9 percent estimated in July.

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