Japan suffers credit downgrade following VAT rise delay
- 5 December 2014 | Richard Asquith
One of the three major credit rating agencies, Moody’s, has downgraded Japan’s credit rating following the decision to delay the Japanese Consumption Tax rise to 10% in 2015.
The rise had been planned to help the country manage its large soverign debt problems, and meet the costs of an aging population. However, it was delayed last week following a slump in growth in the second and third quarters of 2014. This was partially caused by the first leg of the VAT / Consumption Tax rise from 5% to 8% on 1 April 2014.
Japan’s new credit rating has changed, but Moody’s predicts a stable 12-18 months. Read more about Japanese Consumption Tax here.