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29 Oct 2014
S&P: Japan sales tax hike may be credit negative
FXStreet (Bali) - According to the rating agency Standard & Poors, via Reuters, the planned Japan sales tax hike for next year - second in a row - may be credit negative if it harms economy.
As Reuters notes, citing a senior official of S&P: "Japan’s plan to raise its sales tax for the second year in a row next year may not be positive for the country’s credit rating if it snuffs out any chance of economic recovery,
Reuters adds, citing Takahira Ogawa, director of sovereign ratings at the agency: "If the government were to delay next year’s tax increase, it would still need to cut welfare spending and push through structural reforms to accelerate economic growth."
At present, as Reuters informs, S&P has an AA- rating on Japan, which is three notches below the top rating of AAA, with a negative outlook, implying that a downgrade is a possibility.
As Reuters notes, citing a senior official of S&P: "Japan’s plan to raise its sales tax for the second year in a row next year may not be positive for the country’s credit rating if it snuffs out any chance of economic recovery,
Reuters adds, citing Takahira Ogawa, director of sovereign ratings at the agency: "If the government were to delay next year’s tax increase, it would still need to cut welfare spending and push through structural reforms to accelerate economic growth."
At present, as Reuters informs, S&P has an AA- rating on Japan, which is three notches below the top rating of AAA, with a negative outlook, implying that a downgrade is a possibility.