TOKYO: A key economic adviser to Japanese Prime Minister Shinzo Abe said on Monday that the next sales tax rise should be delayed by a year and half, to 2017, as a tax hike in April has hit the economy harder than expected.
Etsuro Honda, a prominent outside architect of Abe's reflationary policies, added to a recent chorus of cautious views on the sales tax hike planned for next year, clouding the outlook for Japan's efforts to curb snowballing public debt.
Prime Minister Shinzo Abe is due to decide in December whether to go ahead with the second sales tax rise in October 2015, after assessing third-quarter gross domestic product data and other forthcoming indicators.
The University of Shizuoka professor said a recent slew of weak economic indicators including household spending, factory output and exports made him think that the economy is clearly "undershooting" his outlook seen just a couple of months ago.
In July, Honda told Reuters that the economy was on track after April's sales tax hike while he dismissed the need for fresh BOJ stimulus.
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