Yuko Takeo and Emi Urabe
Word Count: 253
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(Bloomberg) -- Japan will go ahead with a sales tax increase in October but will also be prepared to put together an additional spending package if the economy takes a turn for the worse, according to a new mid-term economic plan, submitted by a government panel led by Prime Minister Shinzo Abe on Tuesday.
The main points of the plan are almost certain to become government policy given that the panel includes six Cabinet members, including Abe, and Bank of Japan Governor Haruhiko Kuroda. The plan makes no changes to Japan’s fiscal consolidation goals.
A draft of the plan released by the Cabinet Office showed that the government intends to use the extra proceeds from raising the sales tax to 10% to shore up social security funding and fund policies to tackle the low birth rate.
The plan said the government will "not hesitate" to deploy macroeconomic policies as needed if risks to the economy materialize.
The mid-term economic plan also included the following points:
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