TOKYO — Japan’s economy unexpectedly shrank in the third quarter, according to government data released there on Monday, extending a painful slump triggered by an increase in the national sales tax and making it more likely that policy makers will put off a second tax hike scheduled to take effect next year.
The two-stage tax increase has become an all-consuming political issue in Japan, to the point that Prime Minister Shinzo Abe is considering dissolving Parliament and calling fresh elections, people close to him say. Monday’s economic report is seen as critical to Mr. Abe’s decision, which is widely expected to come this week.
The preliminary report, issued by the Cabinet Office, showed that gross domestic product fell at an annual pace of 1.6 percent in the quarter through September. That added to the previous quarter’s much larger decline, which the government now puts at 7.3 percent, revised downward from 7.1 percent in its last report.
The third-quarter G.D.P. figure confounded analyst forecasts, which were mostly more optimistic. Economists surveyed by news agencies and think tanks had been forecasting annual growth of slightly more than 2 percent on average. Mr. Abe has not said how much the economy would have needed to grow to give him the confidence to raise taxes again, but one of his economic advisers, Etsuro Honda, has argued that the minimum number needed to be close to 4 percent — higher even than the forecasts and far better than the surprising negative result.
Although the next tax increase would not come into effect until October, Mr. Abe needs to decide what to do about it soon, to give Parliament time to change the relevant legislation if he opts to cancel or postpone it. If fully implemented, the plan would double the tax on all goods and services sold in the country, to 10 percent, over 18 months. It now stands at 8 percent after the first stage went ahead in April.
The increases are aimed at curbing Japan’s massive government debt, which at about two and a half years’ national economic output is the largest in the developed world. But there are concerns that after years of sluggish wage growth, consumer confidence is still too weak handle them. Instead of solving the debt problem, heavier taxes could simply push the economy back into a downward slide.
Mr. Abe has been trying to end Japan’s long era of deflation through an unprecedented campaign of economic stimulus. The effort, known as Abenomics, has dealt with setbacks in recent months. After the unexpectedly severe slowdown in the second quarter, institutions ranging from the International Monetary Fund to the Bank of Japan have cut their estimates for economic growth this year and next. The central bank, its goal of reaching 2 percent stable inflation looking increasingly out of reach, was prompted late last month to expand a stimulus program involving massive purchases of government bonds.
安倍晋三一直设法通过一个前所未有的经济刺激行动，来终结日本长期存在的通缩状况。这项被称作“安倍经济学”的行动最近几个月遭遇了一些挫折。在二季度出人意料的严重下滑之后，国际货币基金组织(International Monetary Fund)和日本银行(Bank of Japan)等机构纷纷下调了对日本经济今年和明年的预期。其央行日本银行距离让通胀率保持在2%的目标似乎越来越遥远，上个月末，该机构不得不扩大了一个大规模购买政府债券的刺激计划。
Abenomics is now in a particularly delicate phase. Consumer prices are rising, if not yet as strongly as hoped, as are corporate profits and the value of assets like stocks and property. But so far not much of the new wealth has reached average workers. Incomes have fallen behind the rising cost of living, in effect making people poorer. Another of Mr. Abe’s advisers, Kozo Yamamoto, a lawmaker in his ruling Liberal Democratic Party, says the second tax rise needs to be put off “until wages catch up” to prices.
安倍经济学目前处于一个特别棘手的阶段。物价在上涨，虽然可能没有期望的那么强劲，企业利润以及股票和房地产价格也在上涨。但到现在为止，并没有很多新财富流入普通工薪阶层手中。收入水平已经落后于生活成本的不断增长，人们实际上正在变得更加贫穷。安倍领导的执政党自民党(Liberal Democratic Party)议员、他的另一位顾问山本幸三(Kozo Yamamoto)说，第二次增税的举措需要推迟，“除非工资水平追上”物价。
Monday’s data showed surprising weakness across most areas of the economy. Consumer spending barely picked up from its depressed level after the tax increase in April, while indicators of housing and business investment declined.
Mr. Abe does not need to call an election to modify the tax plan, since his party is in firm control of both houses of the national legislature, the Diet. Even the existing tax legislation gives him some scope for review if he judges that the economy is struggling, and with a parliamentary majority the L.D.P. and its smaller coalition partner, New Komeito, could rewrite the law as they wanted.
Parliament’s current term lasts until mid-2016, making any election a year and a half sooner than legally necessary. Some political commentators have suggested the tax issue is merely a convenient pretext for Mr. Abe to seek a fresh term while he has political advantage on his side. Opposition parties are weak and disorganized, and although his once-sky-high poll ratings have slipped he remains relatively popular, with public support of around 50 percent.
A majority of voters say they would like to see the tax hike scrapped, and the conventional wisdom is that the L.D.P. would easily win a snap election, particularly if its campaign were based on changing course on the tax.