Nobel Prize-winning economist Joseph Stiglitz on Wednesday urged Japan to postpone a planned tax hike, warning that boosting the tariff could hurt the debt-hit economy as global markets slump.
The comments come as Japanese Prime Minister Shinzo mulls postponing the consumption tax hike ahead of summer elections, in a possible about-face from a previously repeated pledge to carry it out.
Stiglitz, a long-time critic of austerity schemes pursued by Western governments, met with Abe and other top officials ahead of a Group of Seven summit in Japan in May.
He cautioned against a consumption tax hike scheduled for April 2017 that would raise the levy from eight to 10 percent.
"A consumption tax increase now is going in the wrong direction," Stiglitz told reporters after the meeting.
"A few years ago, no one would have anticipated that the global economy would be as weak as it is today.
"When economic circumstances change, you have to adapt your policy," added Stiglitz, who advised former US president Bill Clinton and won the 2001 Nobel in economics.
Analysts have speculated Abe wants to delay the unpopular tax hike -- which was decided before he returned to power -- as lawmakers head to an upper house election expected in July.
The last consumption tax hike from five to eight percent in April 2014 -- the nation's first in 17 years -- slowed consumption and pushed the world's third-largest economy into a brief recession.
Critics say Japan must increase tax revenues in the face of soaring debts and to pay for the ballooning cost of welfare as the population rapidly ages.
Government coffers are deep in the red with public debt standing at twice the size of the economy, the worst among industrialised economies.
Stiglitz's views echo similar calls from Abe's close advisers who say they are against the hike because it risks further slowing Japan's stagnant economy.
The current tax hike plan already marks a delay after Abe argued for putting it off for 18 months, saying implementing the original schedule of October 2015 would derail the nation's fragile recovery.
Abe has since pledged to stick with the new plan -- barring a global crisis akin to the 2008 financial turmoil that slowed the world economy.
Since Abe returned to power three years ago his government has pushed a big-spending, easy money policy.
The scheme quickly boosted stocks and drove down the yen, making Japanese exports more competitive, but has also added to public debts.
After early successes, the eponymous "Abenomics" has fallen short of its original promise to end years of on-off deflation and spur sustained growth.