Nobel-winning U.S. economist Joseph Stiglitz on Wednesday urged Japanese Prime Minister Shinzo Abe to forgo a planned consumption tax hike in April 2017, given that the global economic outlook this year is expected to be weaker than the 2015 level.
“A consumption tax increase now is going in the wrong direction,” the economics professor at Columbia University told reporters following an economic meeting with Abe and other top government officials.
The meeting was the first of a string of hearings aimed at listening to the views of domestic and international experts on global economic and financial conditions in the lead-up to the Group of Seven summit in Japan in May.
They are expected to influence government decisions over whether to go ahead with the sales tax hike.
Stiglitz said to reporters at the prime minister’s office that the year of 2015 “was the weakest year since the global financial crisis” in 2008. “My own view is that 2016 will probably be even weaker.”
Though Japan had a “very strong” monetary policy and had stimulated the economy, there were “limits” to the impact of monetary policy, the winner of the 2001 Nobel Prize in economics said, while adding fiscal policy should now be the focus.