Abe puts off tax hike, calls snap polls in Japan

Japan’s Prime Minister Shinzo Abe called a snap election for December and put off a sales tax hike planned for next year until 2017 as the country struggles to fend of recession. Abe said on Tuesday that he decided to postpone a second tax hike after Japan, the world’s third largest economy slumped into recession due to a tax increase in April. Abe said he will dissolve parliament on Friday. The election is scheduled for mid-December. Delaying the tax hike will slow Japan’s work on repairing its tattered public finances. Abe said the risk to the economy was a bigger threat. Fresh elections may seem a puzzling decision given the bad news on the economy but the liberal democrats have a solid majority and hope to further consolidate heir power at a time when opposition parties are weak and i disarray.

The general election will seek a removed public mandate for Abe’s all-or-nothing bid to revive Japan’s economy, which has suffered from deflation and stagnation for two decades. After taking office two years ago, Abe declared “Japan is Back” and vowed to restore his country’s fading economic might. Japan needs more tax hikes to get its swollen government debt under control, but th April tax increase, to 8% from 5% crushed consumer and business spending. As early as last week, the Liberal Democrats were coaching freshman lawmakers on campaign strategies and opposition parties rushed to discuss possible new alliances. Pre-election debates by party leaders are in the works, and new campaign posters have gone up in Tokyo neighborhoods.

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