The nation's economy will stall for the next few years against the backdrop of the planned two-stage sales tax hike, the Organization for Economic Cooperation and Development projects in its biannual report released Tuesday.
The world's third-biggest economy would see its gross domestic product growth slow to 1.5 percent in 2014 and 1.0 percent in 2015, adjusted for inflation, following a 1.8 percent expansion in 2013, the OECD said in its report.
The Paris-based club of 34 economically advanced nations, meanwhile, urged Japan to craft a "credible" strategy to attain its fiscal reconstruction goal, indicating Prime Minister Shinzo Abe's government would be forced to work harder to shore up the economy and restore its debt-ridden public finances simultaneously.