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2013年8月14日 (水)

2.6%成長 消費増税に耐えられる体力か

The Yomiuri Shimbun August 14, 2013
Has the economy recovered enough to withstand consumption tax hike?
2.6%成長 消費増税に耐えられる体力か(8月13日付・読売社説)

Although Japan’s economy continued to grow in the April-June quarter, it is worrying that the improvement has begun to lose steam.

Prime Minister Shinzo Abe will make a final decision in autumn on whether to raise the consumption tax rate next April as scheduled. The tax increase would be in vain if it harms the economy and spoils an opportunity to escape deflation.

Abe will have to make a difficult judgment on whether the national economy has recovered enough to withstand a consumption tax hike.

The nation’s real-term gross domestic product for the April-June period, released by the Cabinet Office on Monday, improved 0.6 percent over the previous quarter, recording a third straight quarter of growth. The growth rate stood at 2.6 percent on an annualized basis, down from 3.8 percent registered in the January-March quarter.

Personal consumption and exports soared in the April-June quarter due to the effects of Abenomics, the economic policy put forth by the Abe administration. But plant and equipment investment, which had been expected to be a growth engine, declined for the sixth consecutive quarter and housing investment dropped unexpectedly.

The growth rate for the April-June period is an important indicator to judge whether the consumption tax rate should be increased from 5 percent to 8 percent as scheduled.

Private-led growth vital

Akira Amari, state minister for economic and fiscal policy, acknowledged the continued growth during a news conference Monday, noting that “favorable figures have continued to be recorded.” But the growth rate figure was far lower than the mid-3 percent level anticipated by economists.

Abe told reporters the government “will continue to take all possible economic measures.” The goal of ending deflation must be achieved by putting top priority on business revitalization.

It is important to achieve self-sustaining economic growth led by the private sector. The government must promptly carry out measures such as those to help boost capital investment by private firms. An extraordinary Diet session to be convened in autumn is expected to be a crucial stage for the promotion of the government’s growth strategy.

A tax rate increase of three percentage points is estimated to raise consumer prices by about 2 percent. If prices rise but household income does not, consumption will suffer a blow. The key here is whether corporate profits will be smoothly reflected in wages.

When the sales tax was increased from 3 percent to 5 percent in April 1997, households suffered additional burdens caused by, among other factors, the discontinuation of special tax reductions. This was accompanied by the Asian monetary crisis and serious financial uncertainties, thereby causing the national economy to slow down sharply. It must be remembered that these developments led to long years of deflation.

Consumption tax revenue climbed, but revenue from income and corporate taxes dropped, making it more difficult to achieve the key goal of fiscal rehabilitation.

To prevent a repetition of the past policy blunder, it is of utmost importance to analyze the economic situation from multiple perspectives.

It was reasonable that Abe has called for listening to the opinions of experts and corporate managers about the advisability of raising the consumption tax and the likely effects of a tax increase and using that input when making a policy judgment.

The government must lend an unprejudiced ear to voices from various sectors.

(From The Yomiuri Shimbun, Aug.13, 2013)
(2013年8月13日01時29分  読売新聞)


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