New York Times (May 17)
“Japan’s economy, the world’s third largest, expanded at the fastest pace in a year during the first quarter on stronger private consumption and exports, complicating Prime Minister Shinzo Abe’s decision on whether or not to delay a planned sales tax increase next year.”
Wall Street Journal (October 12)
Japan’s dilemma over whether to proceed with the sales tax increase to 10% “mirrors the dynamics in Europe, where France and Italy recently delayed deficit-reduction plans, fearing that spending cuts could tip their fragile economies back into recession.” With much of the developed world facing aging demographics and similar quandaries, all eyes are on Japan. “In a world haunted by stubbornly slow growth and low inflation, Japan’s clinical trial—whether it ends up cure or toxin—will inform other countries when they reach Japan’s state.”
Tags: Deficit reduction, Demographics, Dilemma, Economies, Europe, France, Growth, Inflation, Italy, Japan, Recession, Sales tax, Spending cuts
Bloomberg (June 26)
“Japan’s consumer prices climbed at the fastest pace in 32 years, boosted by higher utility charges and a sales-tax increase that contributed to the biggest slide in household spending since the March 2011 earthquake.”
Financial Times (July 3)
“A tax rise now means hitting the fiscal brake while stepping on the monetary accelerator…. At some stage, Japan will probably have to raise sales tax from its hardly onerous level of 5 per cent. Mr Abe should think long and hard, however, about whether that time is now.”
Tags: Abe, Fiscal brake, Japan, Monetary accelerator, Sales tax, Tax rise
Wall Street Journal (June 8)
The International Monetary Fund’s Acting Managing Director John Lipsky backs increasing the sales tax in Japan as early as next year. Lipsky believes not increasing taxes would be a “wasted opportunity.” The comments may “reflect international concerns that fiscal problems in the world’s third-largest economy would eventually hurt the global economy if left untreated–after debt crises in European economies of much smaller scale roiled the global market in recent years.”
