The Bank of Japan will be able to achieve its 2 percent inflation target even if the sales tax is raised as scheduled next April, as the move is unlikely to stall the economy, BOJ Gov. Haruhiko Kuroda said Tuesday.
"Basically, a consumption tax hike will not let the economy stall to prevent us from achieving a 2 percent price stability target," Kuroda said on an NHK program, suggesting the tax hike would have limited impact on the economy.
He also said Japan can still attain around an average 2 percent growth in the next three years if the government goes ahead with its plan to lift the current 5 percent sales tax to 8 percent next April and to 10 percent in October 2015. "The economic growth and consumption tax hike, or restoring fiscal health, can exist together," Kuroda said, calling on the government to proceed with its efforts to achieve fiscal consolidation.