Koizumi sees low growth for another 2-3 years

Japanese Prime Minister Junichiro Koizumi said Tuesday the country must tolerate low growth for another two to three years before enjoying the fruits of a major reform drive.

"Structural reforms are still progressing. We must endure low growth for two to three years before seeing the effects," Koizumi said on the legislative floor of parliament where he answered questions from opposition lawmakers.

"We will comprehensively conduct four pillars of reforms -- financial system, tax system, budgetary spending, and regulations -- while working to overcome deflation," he said.

Opposition lawmakers blamed the Koizumi cabinet for Japan's billowing economic woes, such as decreasing tax revenues and weak stock prices.

They called on Koizumi to resign as premier and said the lower house should be dissolved for a snap election.

In response, Koizumi said: "I have no intention to dissolve it."

"Our work on reforms is mounting. We should think about (dissolving the parliament) after we make achievements. I have no intent to resign, either," he added.

Outside parliament, lawmakers and business leaders continued to debate whether the Bank of Japan (BoJ) should implement a positive inflation target to reverse a steep slide in prices that has restricted economic growth.

The talk came as the central bank began a two-day policy setting meeting.

"It is important... for us to have continued discussions" about implementing a target for inflation, Masashi Teranishi, chairman of the Japanese Bankers Association, told a news conference.