How Japan's VAT increase has shrunk the economy

3. With the exception of flat growth in the last quarter of 2013, this is the first quarterly contraction in nearly two years.

4. Household or private consumption, which accounts for about 60pc of the economy, fell 5pc

5. Household investment shrank by 10.3pc, business investment fell only 2.5pc.

6. Public demand grew 0.2pc as decrease in public investment was offset by rise in government consumption.

7. Exports of goods and services dipped 0.2pc while imports dropped by 5.6pc.

8. The economy has been boosted by Prime Minister Shinzo Abe's growth blitz, dubbed Abenomics, which helped sharply weaken the yen, giving a lift to exporters' profitability and driving a stock market rally last year.

9. Abe wants to raise taxes again to 10pc next year but he faces criticism over the pace of his efforts to shake up the highly regulated and protected economy.

10. The country's last sales tax rise in 1997 foreshadowed a drop into years of deflation and tepid growth.

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