|Above, Akihabara's "electric town" section of Tokyo. Photo by Armand Vaquer.|
One could have almost predicted this. Japan is now in a recession thanks to Prime Minister Shinzo Abe's consumption tax hike.
According to Japan Today:
TOKYO —Japan’s economy dropped into a recession after a second-straight quarter of contraction, official data showed Monday, in a huge blow to Prime Minister Shinzo Abe’s bid to turn around years of laggard growth.
The country’s gross domestic product shrank 0.4% in the July-September quarter, or an annualised rate of 1.6%, underscoring how an April tax rise dented growth in the world’s number three economy and weighing on the chances of a second levy hike next year.Raising taxes will make people modify their spending (in other words, tighten their belts). This is especially true with high-ticket items such as electronics, major appliances, furniure and automobiles. People will either forego or delay purchases of these items due to the tax bite.
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