After news that Japan’s economy shrank for a second quarter, Prime Minister Shinzo Abe delayed a plan to raise the country’s sales tax next year, dissolved parliament, and called for a snap December election to gauge public support for his policies. CCTV America’s Mike Firn reported this story from Tokyo.
Japan PM asks country to vote on his economic policiesAfter news that Japan's economy shrank for a second quarter, Prime Minister Shinzo Abe delayed a plan to raise the country's sales tax next year, dissolved parliament, and called for a snap December election to gauge public support for his policies. CCTV America's Mike Firn reported this story from Tokyo.
For nearly two years, Abe has been promising his economic revitalization plan would raise spending, end deflation, keep jobs in Japan, and cut the country’s massive public debt. But April’s three percentage point rise in sales tax hit the economy harder than expected.
Consumer spending crept up four-tenths of a percent in the third quarter and Gross Domestic Product continued to shrink, sending Japan into a technical recession. Even before the announcement a Jiji Press poll found that support for the Abe cabinet stayed below 50 percent for a second straight month.
In an attempt to win back public support, Abe delayed next October’s two-percentage point sales tax increase by 18 months. The government’s also planning more spending to help households and prop up struggling regional economies.
The early parliamentary election will take place in mid-December. Abe said he will resign if he fails to secure a lower house majority.
Some economists said the moves will buy more time for Abenomics, while others said tax delays and higher spending may raise global concerns about Japan’s ability to cut the biggest public debt among industrialized nations. Other experts have also argued that getting Japan out of a recession is more important than raising revenue right now.
CCTV America interviewed Ed Rogers, the chief executive of Rogers Investment Advisers, about the Abe’s polices and the Japanese economy.