Japan’s economy fell into recession Monday in a set back for Prime Minister Shinzo Abe’s administration, local media reported.
The second successive quarter of negative growth will put pressure on the government to postpone a planned sales tax increase, the Kyodo news agency said.
The Cabinet Office said gross domestic product shrank 1.6 percent in the three months to September, the Japan Times reported.
The poor economic performance over the past six months is the worst in more than five years, the newspaper said.
An increase in sales tax from five percent to eight percent in April pushed up the cost of living, putting greater pressure on Japanese households already facing rising prices.
As inflation continues to outpace wages, a further rise in sales tax, scheduled for next October, risks damaging consumption and reducing support for Abe’s economic policies, the Times added.
It has been widely reported that Abe is considering an election next month and postponing the tax hike until 2017.
The fall in GDP in the third quarter followed a 7.3 percent drop between April and June, the Cabinet Office said in a preliminary report.
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