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Tax hike sent tertiary index tumbling at record pace in April-June

JIJI

The tertiary industry activity index for the April-June quarter tumbled at its fastest pace since comparable data became available in 1988 because of the consumption tax hike, according to government data released Monday.

The index fell 3.8 percent from the previous quarter to 97.9 against the 2005 base of 100, after seasonal adjustment, marking its lowest level since 97.0 in the same quarter in 2011, and the first drop in two quarters, the Ministry of Economy, Trade and Industry said.

The tertiary industry activity has been slow to recover since diving after the consumption tax was raised in April, a METI official said.

The index fell in 11 of 13 sectors surveyed, with wholesalers seeing the largest drop at 9.2 percent.

In June alone, the index fell 0.1 point from the previous month to 98.1, the first fall in two months.