Japan’s economic woes mean it’s only Chinese tourists who are splurging in the upscale department stores of Tokyo’s fashionable Ginza district, Nakamura said while shopping with her 79-year-old mother, Sachiko. Delaying the sales tax increase to avoid a slump in consumer spending won’t change her buying pattern, she said, adding that she’s put away large supplies of toilet paper, shampoo and other daily necessities.
“I haven’t spent much, and it won’t change even after the tax-hike delay because it’s just a temporary measure while this nation’s future remains uncertain,” said Nakamura, 54, after buying bread from a department store in Ginza yesterday. “I want the government to promise that they’ll surely use our taxes to improve social security.”
Prime Minister Shinzo Abe said Wednesday he’s postponing an increase in sales tax to October 2019 and promised bold economic steps, as the government seeks to avoid depressing private consumption which accounts for about 60 percent of Japan’s gross domestic product. It’s an about-face for the Japanese leader who has repeatedly said he would raise the tax to 10 percent in April 2017 from 8 percent, in a bid to contain the world’s largest debt burden.
The delay will ease pressure both on Japanese consumers and consumer-goods suppliers, at least in the short run, according to Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo. Still, it’s unlikely to alter the course of spending, which has been weakening “little by little,” he said.