Japan's Abe says 2014 third-quarter GDP key to second sales tax increase

TOKYO (Reuters) - Japan's economic growth in the July-September quarter next year will be a crucial factor determining whether the government proceeds with a second stage of sales tax increases in 2015, Prime Minister Shinzo Abe said on Friday.

The government has already decided to raise the sales tax to 8 percent from 5 percent in April, which is part of a two-stage increase that will bring the tax rate to 10 percent in October 2015.

Abe said he wants to see whether the economy rebounds in July-September quarter from an expected downturn after the first sales tax hike in April, before deciding whether to go-ahead with the second increase in the tax.

"Household spending will fall in the April-June quarter. What's important is for the economy to avoid a downturn," Abe told a television programme on Friday.

"I'd like to make a decision on the next tax hike after confirming figures on the economy for July-September," he said.

Abe also repeated his plea to Japanese companies to increase wages, which he described as crucial in making the current economic recovery sustainable.

Japan's preliminary third-quarter gross domestic product (GDP) data is usually released around November.

(Reporting by Izumi Nakagawa, writing by Leika Kihara; Editing by Simon Cameron-Moore)