TOKYO – Japan’s retail sales tumbled in October due to sales tax hike that prompted consumers to cut spending, raising a red flag over the strength of domestic demand.
The Japanese government increased the nationwide sales tax to 10 percent from eight percent on Oct. 1, in a bid to fix the industrial world’s heaviest public debt burden, which is more than twice the size of the country’s gross domestic product.
Retail sales fell 7.1 percent pulled down by weak demand for big ticket items such as cars and household appliances as well as clothing, trade ministry data showed on Thursday.
The data showed that department store sales were hit particularly hard.
The drop marked the biggest since a 9.7 percent fall in March 2015 and was worse than a 4.4 percent decline predicted by economists in a poll.
It was also sharper than the declines reported after the last two times the sales tax was raised, suggesting other factors might also be dragging the consumption. (Reuters)
