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Japan's PM to dissolve parliament, calls snap election


Japanese Prime Minister Shinzo Abe on Tuesday called for snap elections in December and said he would dissolve parliament on Friday. The move comes a day after new figures showed Japan had unexpectedly slipped into recession in the third quarter.


Japan’s Prime Minister Shinzo Abe has called a snap election for December and put off a sales tax hike planned for next year until 2017 as the country struggles to deal with a new recession.

Abe said Tuesday that he decided to postpone a second tax hike after the economy unexpectedly slumped into recession in the third quarter of the year following a tax increase in April, showing it’s too weak for another increase so soon.

Abe said he would dissolve parliament on Friday. 

The ruling Liberal Democrats have a solid majority and hope to consolidate their power at a time when opposition parties are weak and in disarray.

Delaying the tax hike will slow Japan’s work on repairing its tattered public finances, but Abe said the risk to the economy was a bigger threat.

Abe inherited the plan for higher sales tax when he took power in December 2012, pledging to revive the economy with his “Abenomics” mix of ultra-easy monetary policy, spending and reforms.

Economy Minister Akira Amari has said the GDP data showed the April tax hike to 8 percent from 5 percent had made it harder than anticipated for the public to shake off their deflationary mindset.

Household spending is stagnating, with housing investment and corporate capital spending down, Amari said, while finding a bright spot in strong corporate profits.

On a quarter-on-quarter basis, the economy shrank 0.4 percent in the third quarter, following a contraction of 1.8 percent in the second quarter. Recessions are typically defined as two or more consecutive quarters of economic contraction.

Private consumption, accounting for about 60 percent of the economy, rose 0.4 percent from the previous quarter, half as much as expected.

(FRANCE 24 with AP and REUTERS)

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