TOKYO — Japan has officially tipped back into recession, with new figures Monday showing that the world’s third-largest economy shrank for the second quarter in a row as consumers kept their yen in their pockets.
The worse-than-expected figures offer statistical proof that Prime Minister Shinzo Abe’s much-touted “Abenomics” revival plan has not boosted growth in Japan’s stubbornly lackluster economy.
Abe is expected to announce Tuesday that he will dissolve the lower house of the Diet and call a snap election for December, enabling him to delay a much-feared increase in the consumption tax.
“The numbers are absolutely awful, beyond-description awful,” said Peter Tasker, a longtime analyst of Japan’s economy and a strong supporter of Abe’s economic policies. “It’s clear that the tax hikers and the fiscal hawks have tanked the economy.”
The cabinet office said Monday that the economy had shrunk by 1.6 percent in the three months to the end of September, compared with a year earlier. Economists had been expecting the statistics to show that the economy had grown by 2 percent in the quarter, according to surveys.
But the bad news didn’t end there. The official figures for the previous three months were revised to show that the economy shrank by 7.3 percent in the second quarter compared with the same period a year earlier, worse than previously thought.
Economists are now saying it is certain that Abe will delay a second planned increase in the consumption tax, which had been part of his ambitious “Abenomics” plan to kick-start growth after two decades of stagnation and falling prices.
The three-point increase in the consumption tax, to 8 percent, in April was the first time in 17 years that the tax had gone up, and the sudden increase in prices after years of deflation led consumers to stop spending.
A second increase, to 10 percent, is planned for October 2015, but Abe had said he will wait for the latest quarterly data before deciding whether to press ahead.
Akira Amari, the economy minister, said Monday that the data showed the April tax increase had a much more negative effect on the economy than anticipated and that a decision on the second increase will be announced Tuesday.