Japan’s retail sales dropped at the fastest pace in at least 14 years last month after the first consumption-tax increase since 1997 depressed consumer spending.
Sales in April declined 13.7 percent from the previous month, the trade ministry reported Thursday, more than the median forecast of an 11.7 percent decline in a Bloomberg News survey of 11 economists.
The drop-off follows a consumer splurge in March ahead of the 3 percentage point tax increase from April 1. The data highlight the difficulties Prime Minister Shinzo Abe faces in steering the world’s third-largest economy through a forecast contraction this quarter.
“Today’s data suggest that the government and the Bank of Japan are too optimistic in their view that the fall-off in demand is within expectations,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “Even so, the economy should be able to withstand the drop in consumption.”
Sales in April fell 4.4 percent from a year earlier, with drops in purchases of motor vehicles, clothing and other items contributing to the slide.
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