Japan sales tax hike plan may be negative if it harms economy – S&P
- Japan’s plan to raise its sales tax for the second year in a row next year may not be positive for the country’s credit rating if it snuffs out any chance of economic recovery, a senior official of Standard & Poor’s said.
- If the government were to delay next year’s tax increase, it would still need to cut welfare spending and push through structural reforms to accelerate economic growth, Takahira Ogawa, director of sovereign ratings at the agency, said.
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- S&P has an AA- rating on Japan (three notches below the top rating of AAA)
- With a negative outlook (meaning a downgrade is possible)
