Prime Minister Shinzo Abe will make a final judgment Oct. 1 on whether to raise Japan’s sales tax rate to 8 percent from the current 5 percent next April, economic and fiscal policy minister Akira Amari said Monday.
If Abe decides to carry out the tax hike, the government needs to announce at the same time a package of measures to prevent the tax increase from hurting the economy, which has recently shown signs of emerging from nearly two decades of deflation, Amari said in a speech in Tokyo.
Earlier in the day, Amari indicated that the tax increase is likely, as Japan’s annualized real economic growth rate in the three months through June was upwardly revised to 3.8 percent from 2.6 percent in the preliminary report.
“It’s a good figure,” Amari told reporters following the release Monday of the revised April-June gross domestic product data, adding the effects of Abe’s economic policies dubbed “Abenomics” have “been steadily emerging.”
Amari also said the success of Tokyo’s bid to host the 2020 Summer Olympics is “extremely bright news,” suggesting he believes it would prompt Abe to proceed with the first round of a two-stage increase to 10 percent in October 2015 to cover swelling social security costs as Japan’s population ages.
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