Japan’s gross domestic product is expected to grow by 0.9% this fiscal year, down from a January estimate of 1.7%, the Japanese government said. The downward revision was due to weaker consumption and investment flow as well as global economic slowdown and post-Brexit market turmoil.
Moreover, the second increase in the sales tax planned for April 2017, from the current 8% to 10%, will be delayed until October 2019. Initially, it was set for 2015.
The first increase in the sales tax from 5% to 8% in April 2014 dragged Japan back into a temporary recession. In particular, consumer spending fell considerably.
The inflation forecast was also downgraded to a rise of 0.4% from an earlier projection for 1.2%.
Japan's Cabinet is developing fiscal measures worth $192 billion to bolster the country’s economy.
