I believe that the impact of the consumption tax hike scheduled for 2019 is highly uncertain, yet most likely to be smaller than the impact of the tax hike in 2014.
Moreover, the impact of the recession on various policy responses such as the consumption tax hike, economic stimulus measures, and additional monetary easing is drawing much attention.
TPPより強い反発のある消費増税問題で、どうやって民主党内の理解を得ていくのか。
The issue of an increase in consumption tax is likely to arouse greater resistance than the TPP, so how do you plan on achieving consensus within the Democratic Party of Japan(DPJ)?
Sims: It would be better if instead of setting a new date, it would been made clear that the increase in consumption tax was contingent on getting inflation back up to the target level.
If you leave them alone this forever, After all, in this alien of our people is a problem, a toll in the form of such as the consumption tax increases will come more and more.
Adverse effects of consumption tax hike not substantial Japan's real GDP growth rate for FY 2020 is expected to remain unchanged from FY 2019 at about +0.7%, as per the average forecast of forecasting institutions according to Japan Center for Economic Research.
In Japan, I believe that continued recovery demand, increased demand before the April 2014 consumption tax increase, fiscal easing from the change in administration, and heightened anticipation of yen depreciation based on economic stimulus give the potential for an interesting year.
Currently, however, the year-on-year rate of change for the two quarters before the consumption tax hike, i.e., April to June 2019(figures estimated from those of April-May), was +0.0% for automobiles and only +3.9% for equipment such as household appliances.
Real wages per worker have not increased, but real employee income(real wages multiplied by the number of employees) has grown more or less steadily except for fiscal 2014, the year of the consumption tax hike.
In particular, the longer term results of the April sales tax hike are still unknown. Some clients, particularly in the retail sector, are reporting a fall-off in sales but so far we are not seeing any resultant fall-off in recruitment needs.
If people see the tying of the consumption tax to inflation as a government commitment to generating inflation, and to being willing to postpone tax increases until they see the inflation, the inflation might actually pick up quite quickly, in which case 2019 might even seem too late.
Fiscal 2019 and fiscal 2020 will see downside pressure due to such factors as an increase in consumption tax and the amendment of Japan's Civil Code. Nonetheless, we aim to achieve adjusted consolidated profit of between ¥205 billion and ¥215 billion and adjusted consolidated ROE of approximately 8% in fiscal 2020 by strengthening our business foundations through enhancement of productivity in each business and optimization of the product portfolio.
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