10% consumption tax Impact on the Japanese economy October 1 at 0:46
How will the consumption tax rate increase affect the Japanese economy?
Last time, when the consumption tax rate was raised from 5% to 8% in April 2014, demand rushed into housing and automobiles for more than half a year.
From January to March 2014, just before the tax increase, the real growth rate converted to GDP = GDP per year was 3.9% more than the previous three months. Until then, personal consumption declined due to a reaction to last-minute demand, and the economy slowed down to an annual rate of minus 7.3%.
On the other hand, according to the average value of 38 companies such as private research companies compiled by the Japan Center for Economic Research this time, GDP growth from July to September is actually an annual rate of 0.62%.
After the tax increase, the GDP forecast from this month to December is only a decline of minus 2.82% per year, and from January to March next year, it will increase to plus 0.58%.
Due to the effects of the government's economic measures such as a pointless system for cashless payments, the economic downturn after the tax increase is limited compared to the previous time, and we expect to maintain positive growth throughout the year.
However, there is a view that consumption has already weakened so that there is no big rush demand, so it is necessary to watch the consumption trend carefully.