Japan's economy contracts by 6.8% due to sales tax increase
August 13 , 2014
Japan’s economy has shrunk 6.8% (annualized) in the year’s second quarter, the highest drop since 2011, according to media reports.
The sales tax is being held responsible for the contraction. In April, the country’s sale tax increased from 5% to 8%.
Meanwhile, private consumption decreased by 5% from the previous quarter.
In this year’s first quarter, the economy grew at 6.1% annualized rate.
Some experts believe that a rebound is likely in the next few months.