Japan’s annual financial growth strategy calls for measures to increase consumption on the assumption it will go ahead with a sales tax hike scheduled for subsequent year, a draft presented at a government panel showed on Wednesday.
But the document could do small to temper speculation that the government will delay the tax boost scheduled for April 2017 amid lingering concern that customer spending is struggling due to low wages for component-time workers.
Prime Minister Shinzo Abe told lawmakers he planned to go ahead with implementing the sales tax as scheduled, but he sidestepped queries on regardless of whether he could alter his thoughts soon after hosting a Group of Seven summit.
“There is no change to intention to raise the sales tax unless there is a Lehman Brothers-type crisis or a natural disaster,” Abe mentioned.
“But I need to consult experts’ opinions on whether we are in such a scenario.”
Japan’s economy expanded more quickly than anticipated in the 1st quarter, information showed on Wednesday, avoiding recession. But economists say patchy growth and worries about a international slowdown could at some point force the government to reverse its official position and steer clear of putting an further burden on households.
Damage from an earthquake final month in the southern manufacturing hub of Kumamoto could also give the government purpose to delay the tax hike ahead of upper home elections in July, some economists say.
Abe’s government is set to finalize its growth strategy ahead of the finish of this month, which will function previously announced policies such as an boost in the minimum wage, much better spend for day care workers and methods to narrow the spend gap among typical and component-time staff.
The draft also referred to as for a study on issuing buying vouchers to households, a policy utilised by earlier governments to attempt to prop up consumption.
In a separate policy statement to be finalised at the finish of May, the government will unveil an extra set of growth plans, which includes an accelerated work to forge cost-free trade agreements, a draft obtained by Reuters showed.
The draft also mentioned, rehashing equivalent growth plans in the previous, the government would set up a council to market the “Internet of Things”, in which industrial and customer firms and computer software providers group up to offer you smarter approaches of carrying out items such as predicting mechanical troubles ahead of they arise.
The government is scheduled to raise the sales tax to 10 % from eight % subsequent April.
Japan will host a Group of Seven finance ministers and central bankers summit from Friday.
(Additional reporting by Kiyoshi Takenaka Editing by Chris Gallagher and Nick Macfie)
