Wednesday 24 Apr 2024
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(Sept 5): Japanese Finance Minister Taro Aso signaled the government should prepare to increase spending to support the world’s third-biggest economy from the impact of a higher sales tax.

“The economy is constantly changing and we need to prepare to be able to react immediately,” Aso, who also serves as deputy prime minister, told reporters in Tokyo today. “A supplementary budget is one method, there are various methods.”

Prime Minister Shinzo Abe faces increased pressure to spur growth after an April increase in the levy triggered the steepest economic contraction since the 2011 earthquake. Abe is set to decide by the end of the year whether the economy can bear another increase as he grapples with the world’s biggest debt burden.

“The possibility of a supplementary budget or other stimulus is in focus now,” Hideo Kumano, an economist at Dai- ichi Life Research Institute in Tokyo, said before Aso’s remarks today.

The tax rose to 8 percent from 5 percent in April. The next proposed increase is to 10 percent.
 

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