Even excluding such factors as the effects of the front-loaded increase in demand prior to the consumption tax hike and the subsequent decline, it is difficult to say that production and consumption have been recovering steadily. The effects of the consumption tax hike have been particularly large on consumption.
The Synthetic Consumption Index – which is a combination of supply-side and demand-side statistics and shows similar movements to consumption on a GDP basis – has not yet surpassed the peak before the front-loaded increase in demand. However, it is natural that a consumption tax hike leads to a decrease in consumption because the hike reduces households’ real income.