18.11.201402:38:46UTC+00Japanese finance minister indicates delay of sales tax

Taro Aso, the Finance Minister of Japan, admitted on Tuesday that although raising the country’s sales tax is a necessary decision to eventually make, he expects Prime Minister Shinzo Abe to announce the postponement of next year’s increase.

The announcement came after data revealed that Japan, the world’s third largest economy, unexpectedly fell into a recession in the third quarter after seeing its gross domestic product shrink for back to back three month periods. Abe is also seen to call for snap elections two years early.

Aso claimed that increasing Japan’s sales tax is still needed to bring down Japan’s national debt and pay for its rising expenses for social welfare.  The minister said that, "The Bank of Japan's ultra-loose monetary policy is based on the assumption that Japan will proceed with efforts to restore its fiscal health.”

Various media outlets see Abe has delaying the tax increase by 18 months and calling for an election in the lower house of parliament as soon as Tuesday with a possible voting date of December 14th.

Aso added that the government will be prioritizing a new supplementary budget that contains funds for a stimulus package that could be worth as much as 3 trillion yen, or $26 billion. Japan’s economic minister, Akira Amari, however, said that no official instructions have yet been issued by the Prime Minister regarding the compilation of stimulus to support households negatively affected by April’s sales tax hike.