Prime Minister Shinzo Abe has decided to raise the consumption tax rate to 8 percent next April as planned, emphasizing the need to demonstrate fiscal discipline by making good on a pledge to the international community, a source close to him said Thursday.
Abe, who has been trying to shake the economy out of nearly two decades of deflation, is also considering implementing a stimulus package worth ¥5 trillion to prevent the tax hike from slowing down the economy, the source said.
A series of indicators, including revised April-June gross domestic product data released Monday, indicate the economy is steadily reinflating, while the success of Tokyo's bid to host the 2020 Summer Olympics has also sparked hope that growth may gain momentum through the expected boom in construction and other sectors.