Sumber: Reuters | Editor: Wahyu Rahmawati
KONTAN.CO.ID - TOKYO. Japanese household spending fell for a second straight month in November and by more than forecast, suggesting that higher sales taxes may weigh on private consumption for sometime.
The world's third-largest economy is struggling to regain momentum after households tightened their belts following the sales tax hike in October and as slower global demand hit exports. Weak consumption will add to the chances economic growth could stall in the final quarter of 2019.
Household spending fell 2.0% in November from a year earlier, government data showed on Friday, worse than a median forecast for a 1.7% decline.
It tumbled 5.1% in October, the biggest fall since March 2016 when spending slid 5.3%.
From the previous month, spending rose 2.6% compared with the median estimate for a 3.4% gain and was a rebound from the steep 11.5% monthly drop in October.
"The pace of a pick-up in household spending in November after a huge drop in October is weak. It is unclear if the spending will recover steadily in coming months given the tax burden and tepid wage recovery," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
"Not only consumer-related data, but also other data, especially factory output, are weak. The focus will be how much the economy shrank in the fourth quarter and how much it will recover in the current quarter."
A pick-up in consumer spending is needed to help underpin the economy and achieve the Bank of Japan's elusive price target.
Although some companies started passing on rising costs to households, many are still reluctant to do so for fear of losing customers as higher prices could dent consumer spending.
Data showed spending on items such as durable goods, including air conditioners, remained weak, but picked up on items such as foods and personal computers.
Japan raised the sales tax to 10% from 8% on Oct. 1, a move that is seen as critical for fixing the country's tattered finances.
But recent weak data on exports and factory output as well as impact from the tax hike suggest the economy could shrink in the fourth quarter after growing an upwardly revised annualised 1.8% in the July-September period.
Weak household spending also bodes ill for the economic recovery, with some analysts expecting consumer spending to contract.
Sluggish wage recovery is adding to worries about private spending, with inflation-adjusted real wages declining at their fastest pace in four months in November.
A central bank survey showed Japanese households' confidence in the economy sank to a five-year low in the three months to December.
Japan launched a $122 billion fiscal package last month to support stalling growth and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.