Japan’s economy unexpectedly slipped into recession in the third quarter, making it almost certain that Prime Minister Shinzo Abe will delay an unpopular sales tax hike and call a snap election two years before scheduled polls.

The bad news Monday comes two years after Abe took office, pledging to improve the slumping economy through massive public stimulus spending and reforms, a plan he called “Abenomics.”

Economists had predicted the world’s third-largest economy would expand. Instead, gross domestic product shrank by an annualized 1.6 percent in the third quarter after tumbling 7.3 percent in the second quarter, following a sales tax hike.

News of the recession caused Tokyo stocks to fall nearly 3 percent Monday, and also had a negative affect on other markets as they opened.
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