Fast rise to fall again. Retail sales in Japan rose in September at their fastest pace in the last five and a half years. Consumers have advanced their purchases just before the sales tax raise that came into effect in October. The September record could anticipate a sharp crash in the following months.
On October 1, an increase in consumption taxes from 8% to 10% came into effect. Japan has the highest GDP debt in the world, forcing progressive tax increases. The previous one took place in 2014 and was, for some economists, the reason for the country’s recession. After being delayed twice, Japan has just applied a second one, with the aim of financing social costs that do not stop rising.
Retail sales in September jumped 9.1% from a year ago, driven by a 16.9% increase in car sales, household durables such as refrigerators, computers or televisions, as well as cosmetics, fashion and food, as pointed out by the Government.
Although warnings about a new impact on the economy of this new tax increase are beginning to resonate, at the time of the announcement of the measure, the country’s prime minister, Shinzo Abe, said that the government had learned from the mistakes of the past. The Oecd, meanwhile, estimated that the impact would be temporary and offset by tax incentives.