Japan’s economy unexpectedly slipped into recession in the third quarter, setting the

Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election halfway through his term in office.

The world’s third-largest economy had been forecast to rebound by 2.1 percent in the third quarter, but consumption and exports remained weak, saddling companies with huge inventories.

Abe had said he would look at the data when deciding whether to press ahead with a second increase in the sales tax to 10 percent in October next year, as part of a plan to curb Japan’s huge public debt, the worst among advanced nations.

Japanese media have said the prime minister, who returns from a week-long tour to China, Myanmar and Australia on Monday, could announce his decision to delay the hike as early as Tuesday and state his intention to call a poll, which ruling party lawmakers expect to be held on Dec. 14.

The economic slide was “shocking,” an Abe economic adviser said, calling for the government to consider measures to support the economy.

Source AP