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Japan retail sales stall in April as Abe mulls delay to tax hike
[TOKYO] Japan's retail sales growth stalled, underscoring weakness in private consumption and increasing the likelihood that Prime Minister Shinzo Abe will delay a sales-tax increase planned for next year.
Sales were unchanged in April from the previous month, the trade ministry reported on Monday. The median forecast of economists surveyed by Bloomberg was for a 0.6 per cent decline. From a year earlier, sales fell 0.8 per cent, compared with a decline of 1.2 per cent forecast in the survey.
Mr Abe told fellow leaders a Group of Seven summit last week in Japan that there is a significant risk of the world economy falling into a crisis on the scale of the 2008 financial crisis if the right policy measures aren't taken.
That's fueling speculation that Mr Abe will soon announce a delay in the consumption levy hike to help support spending. A sales tax increase led to a recession in 2014.
"Private consumption remains stagnant as wages are struggling to rise," Koya Miyamae, an economist at SMBC Nikko Securities in Tokyo, said before the report was released.
"A delay in the sales-tax increase is almost a done deal."
Japan needs to delay increasing the sales tax until late 2019 to sustain its economic recovery, Abe adviser Hakubun Shimomura said on Fuji television over the weekend.