"Economic indicators show the economy isn't in a bad state and raising the sales tax wouldn't slow the economy or the bid to end deflation"
- Takatoshi Ito, Professor at Tokyo University
The world's third largest economy should implement a planned sales tax hike without any compromises even as a group of economists and experts are not univocal on their decision. The bold statement comes from Tokyo University Professor Takatoshi Ito, who pointed out the economy is strong enough to withstand an increase in taxes, while a change in plans may lead to falling stocks, a surge in the Yen and a spike in bond yields, which will all have a negative impact on economic development. Ito was one of five panel members, who agreed to stick to the plan and increase the tax to 8% in April, from the current 5%. Japanese authorities are looking forward to boost growth by any measures, without worsening a public debt, which is already more than twice (214.3%) the size of the economic output.
Meanwhile, Japan's retail sales fell more-than-expected, declining 0.3% on year in July to 11.743 trillion yen, according to the Ministry of Economy, Trade and Industry. The figure came in contrast with analysts' forecasts, who estimated an increase of 0.1% following the 1.6% jump in June. On a monthly basis, retail sales was down seasonally adjusted 1.8% against expectations for a 1.0% fall following the 0.2% decline in the previous month.
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