It is the second consecutive quarter while Japan faces a surprising economic downturn, which shows the technical recession in the country; almost since always listed in the top three economies around the world!
The Country’s GDP shrank by 1.6% in the third quarter which is contrary to the anticipated rate of the positive 2.1%.
The decline of 1.6% is comparatively lower than the second quarter which showed the revised plunge of 7.3%; a great collapse since the earthquake and tsunami instances took place in March 2011. The experts told that contraction in economy growth will surely put off the sales tax increment as well.
Sales tax delay
The prime minister, Shinzo Abe is looking forward to call upon a snap election to check the consent if the 10% rise on sales tax would be planned for 2015.
The requisition of tax enhancement was proposed by last government in 2012 due to the mitigating the rising debts of public, which is unacceptable for the developed nations.
The second quarter was the first phase when sales tax was increased by 5 - 8%, and resulted in denting economic growth in that quarter and also poses negative impact over the economy in this quarter as well.
The economy shrank 0.4% in the third quarter from the previous one.
In relation to last quarter, the economy plunged by 0.4%, whereas the statistics revealed that the private consumption also decreased than expected which is the key determinant represent 60% of the economy. In accordance of expert economist, Glenn Levine at Moody's Analytics, "The Japanese economy is in recession and has now contracted in three of the last four quarters."
The rumors have reached to peak against the current Japanese prime minister, where she has been emphasized to call an election in the upcoming month to ensure the support merely after two years taking the charge of their government.
The chief spokesperson of Japanese government, Yoshihide Suga stated that, “the prime minister was likely inspecting numerous options to overcome from severe economic crisis.”
This downturn has led the dollar trade in exchange of 117 Japanese yen; above from the last 116.46.
