Prime Minister Shinzo Abe and his Cabinet members pledged to make efforts to avoid a sharp economic downturn in the wake of the first consumption tax hike in 17 years from Tuesday.
“We cannot overlook an opportunity to break away from deflation,” Abe told reporters at his official residence. “We will take necessary measures in consideration of people’s lives.”
Finance Minister Taro Aso said at a press conference, “I asked other ministers to swiftly implement a supplementary budget for fiscal 2013 and a budget for fiscal 2014” as they include measures aimed at easing the negative impact of the tax increase.
The government will “enter a crucial stage” in the coming few months, when it can prevent consumer spending and investment from stalling following a rush in demand prior to the tax increase, Aso said.
Aso also said he bought a comic book and a bottle of water at a convenience store early Tuesday, adding, “The 8 percent tax rate was applied. I felt relieved that retailers have reacted (to the tax hike) in an appropriate manner.”
Economic and fiscal policy minister Akira Amari said at a separate news conference, “I hope the economy will return to a growth path as soon as possible as we will minimize a decline in demand through smooth implementation of the budgets.”
Chief Cabinet Secretary Yoshihide Suga and Economy, Trade and Industry Minister Toshimitsu Motegi echoed the view, saying they will keep an eye on how fast domestic demand will decrease ahead.
