World

Japan’s household spending drops for fourth month after tax hike

DPA Tokyo | Updated on November 27, 2017 Published on August 29, 2014

Household spending in Japan was down year—on—year for the fourth consecutive month in July after a controversial sales tax increase in April, the government said Friday.

The average consumption expenditure per household stood at 280,293 yen (2,703 dollars) for the month, down 5.9 per cent from a year earlier, the Ministry of Internal Affairs and Communications said.

Tokyo raised the national sales tax in April to 8 per cent from 5 per cent, the first hike in 17 years, despite strong public opposition.

Bank of Japan Governor Haruhiko Kuroda told a news conference in early August that the negative impact on the economy from the tax hike is “about to gradually decrease.” The bank has also said the economy was continuing to recover.

Household income declined 6.2 per cent in July for the 10th straight month of fall, the ministry also said Friday, despite reported pay raises at big corporations.

The average income stood at 555,276 yen for the month, the ministry said.

Analysts said wages were not raised at small— and medium—sized companies, especially after the tax increase.

Published on August 29, 2014
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