Skip to comments.Japan firms standing pat on hiring, brace for tax hit: Reuters survey
Posted on 08/22/2013 7:11:14 PM PDT by TexGrill
(Reuters) - Most Japanese companies will not increase hiring in 2014 and more than one in six will take additional cost-cutting steps as a planned sales tax hike next year worsens economic conditions, according to a Reuters poll that underscores skepticism about Prime Minister Shinzo Abe's policies.
The results of the Reuters Corporate Survey offer a sobering mid-term report card on "Abenomics" as the focus shifts from early kudos for fiscal and monetary stimulus to worries about deregulation and efforts to tackle Japan's enormous public debt.
Abe has promised a decision on whether to move ahead with the proposed sales tax hike after a series of government hearings set to begin next week with economists and business leaders such as Toyota Motor Corp's (7203.T) President Akio Toyoda.
The success of Abe's policies will hinge on whether Japan Inc can be convinced to hire more workers, lift salaries and invest more in their operations to move the economy towards sustainable growth and the 2 percent inflation targeted by the central bank. But the Reuters survey conducted between August 2 and August 19 shows more caution than optimism among businesses.
Two-thirds of the 271 senior executives who responded to questions on the sales tax said that the planned hike to 8 percent from 5 percent next April would be negative for business.
When Japan last lifted the sales tax, to 5 percent from 3 percent in 1997, consumer spending soared in advance of the hike and then tumbled when it took effect. That was followed by a recession that pushed the economy deeper into deflation.
(Excerpt) Read more at reuters.com ...
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