TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe said on Sunday that he wants to decide in the autumn whether to proceed with a scheduled sales tax hike next year, while looking carefully at economic indicators.
“We have to look at various data, including the April-June GDP figures, and decide what needs to be done to clear hurdles such as beating deflation, achieving economic growth and restoring Japan’s fiscal health. I’d like to reach a decision in the autumn,” he said.
“It will be a difficult decision. The economy is just starting to recover and now is the best chance for Japan to emerge from deflation. I don’t want to lose this chance. At the same time, markets are watching (progress) on Japan’s fiscal reform.”
Under current law, Japan plans to raise the sales tax rate, now at 5 percent, by 3 percent in April next year and by another 2 percent - to 10 percent - in 2015.
Abe’s ruling bloc won a decisive victory in an upper house election on Sunday, cementing his grip on power and setting the stage for Japan’s first stable government since the charismatic Junichiro Koizumi left office in 2006.
Reporting by Leika Kihara; Editing by Edmund Klamann