One potential explanation is that, given that there had been plans to further raise the consumption tax to 10 percent after the hike to 8 percent, people already responded in their consumption behavior as though the tax rate was raised by 5 percentage points to 10 percent.16 In that case, it would be no surprise that real consumption expenditure declined by 3.5 percent.
However, even if we draw the trend based on this assumption, consumption has fallen further behind the trend since the end of 2015. Moreover, if the explanation that people already responded to an expected 10 percent consumption tax hike is correct, the next consumption tax hike to 10 percent should have little effect on consumption, which I find hard to believe.