Japanese Prime Minister Shinzo Abe said he will call an early election to seek a fresh mandate for his economic policies, Reuters reported.
A day after data showed the economy had slipped back into recession, Abe said Tuesday he will postpone an unpopular sales tax rise.
The world’s third-biggest economy unexpectedly shrank for a second quarter in July-September, a sign the pain from an initial rise in the sales tax to 8 percent from 5 percent in April was lasting longer than expected.
Abe said he will delay for 18 months a second increase to 10 percent scheduled for October next year.
He said he will dissolve the lower house of parliament on Friday for an election that must be held within 40 days. The vote is expected on Dec. 14.
The prime minister — who returned to power in December 2012 pledging to revive growth with a mix of easy monetary policy, spending and reform — insisted his policies are working and challenged the opposition to come up with an alternative.
“I am aware that critics say ‘Abenomics’ is a failure and not working, but I have not heard one concrete idea what to do instead,” he said in a televised news conference.
But Abe pledged that the sales tax rise, needed to fund swelling social security costs and curb Japan’s massive public debt, will be implemented without fail in April 2017.
Abe is seeking to renew his mandate just as doubts about the success of his strategy are deepening.
No election for parliament’s lower house needs to be held until late 2016. But Abe is hoping to cement his grip on power before his support ratings, now below 50 percent in some surveys but still sturdy by Japanese standards, slip further.
Contact us at [email protected]