After Elections Japan Will Pause Tax Rate Hike

December 11, 2014 Share Print 0

Mr Abe wants to ensure he has public support to push through his plans to revive the economy.

On 17 November, official numbers showed that Japan’s economic output had shrunk for the second quarter in a row – which means the nation is now in what is called a technical recession.

The numbers also showed that growth in private consumption, which accounts for about 60% of Japan’s economic health, was much weaker than expected.

Many analysts say that an increase in the country’s sales tax in April which was intended to boost the national coffers has instead put consumers off buying new things, especially big ticket items like cars.

The increase in April was from 5% to 8% and there are currently plans to raise it again next year to 10%. Mr Abe wants to delay this, and sees an election win as giving him a mandate to do so.

via BBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.