Sales tax hike takes a bite out of Japan’s economy

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Written by Linda Hohnholz

TOKYO, Japan – The Japanese economy shrank at an annual pace of 6.8 percent in the second quarter after spending got slammed by a sales tax hike that kicked in from April, government figures showed ye

TOKYO, Japan – The Japanese economy shrank at an annual pace of 6.8 percent in the second quarter after spending got slammed by a sales tax hike that kicked in from April, government figures showed yesterday, keeping policy-makers under pressure to expand fiscal and monetary stimulus should recovery falter again.

Japanโ€™s gross domestic product, or the total output of goods and services, also contracted 1.7 percent during the April-June period from the previous quarter.

The decline in GDP was the worst since the March 2011 tsunami and quake disaster in northeastern Japan. In the first quarter of 2011, Japanโ€™s economy shrank at an annual rate of 6.9 percent.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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