The Japanese economy is recovering from the pandemic as related uncertainty and supply constraints subside and consumption gradually rebounds. Growth will accelerate to 2.4 percent this year, the fastest in 12 years, and maintain nearly the same pace next year, according to our latest economic projections in April.
Instead of settling for 1.3 percent annual GDP growth, Japan could grow by an average of approximately 3 percent through 2025. This would lift Japan's projected annual GDP in 2025 by almost 20 to 30 percent over current trends—for an increase of up to some $1.4 trillion in that year alone (Exhibit E3).
On the other hand, Japan, with its rapidly shrinking and aging population, is expected to see its population decrease to 119.2 million by 2050, crack 100 million by 2053, and decline to 59.72 million by 2100—approximately half of what it was at its peak.
The wider economy of Japan is still recovering from the impact of the 1991 crash and subsequent lost decades. It took 12 years for Japan's GDP to recover to the same levels as 1995.
Everybody knows Japan is in crisis. The biggest problems it faces – sinking economy, aging society, sinking birthrate, radiation, unpopular and seemingly powerless government – present an overwhelming challenge and possibly an existential threat.
Weaknesses: A decline in birth rate and hike in aging population leads to economic debt. Japan has far too many people for its little island. Most populations congregate in major cities, like Tokyo, because much of the island is inhabitable.
Japan's population has been shrinking since 2010, when the population peaked at 128.5 million. The United Nations currently projects that Japan's population will fall below 100 million around 2050, but the faster-than-expected decline in fertility may mean that Japan reaches that threshold ahead of schedule.
Japan's economic recovery will be driven by digitization and investments in green technology and human capital, he told The Davos Agenda.
Japan was settled about 35,000 years ago by Paleolithic people from the Asian mainland. At the end of the last Ice Age, about 10,000 years ago, a culture called the Jomon developed.
By 2050, its population will fall below 100 million, of whom 38.8% will be 65 or older. The labor force will fall at an even faster pace by that same year, dropping by over 21 million, for a total of 44 million workers.
Given that Japan's average temperature is rising faster than the global average, this process is expected to continue escalating — that is, unless we slash global greenhouse gas emissions. The same principle applies to heatwaves. Unless we begin drastic emission reductions, Japan will just keep getting hotter.
Looking into 2022, Japan's economy faces several challenges, like keeping the economic recovery going, diversifying investments away from China, and addressing its demographic problems.
Japan's rapid population shrinkage is primarily caused by persistently low fertility. Japan's fertility rate has been declining since the mid-1970s, reaching a total fertility rate (TFR) of around 1.3 children per woman in the early 2000s.
After hovering around zero growth in the late 2000s, Japan's population has been shrinking since 2010, with the decline accelerating in recent years. Breaking its own record every year for the last 10 years, the country experienced another record population loss of 644,000 in 2020–2021.
China has had the largest population in the world since at least 1950, when the UN started keeping records. But it is now projected to experience an absolute decline in its population beginning as early as 2023.
In the 1990s, the Japanese economy suffered a prolonged recession that followed the collapse of the fabled economic bubble of the 1980s.
Japanese life expectancy
This low mortality is mainly attributable to a low rate of obesity, low consumption of red meat, and high consumption of fish and plant foods such as soybeans and tea. In Japan, the obesity rate is low (4.8% for men and 3.7% for women).
With the Act of Seclusion (1636), Japan was effectively cut off from Western nations for the next 200 years (with the exception of a small Dutch outpost in Nagasaki Harbor).
Economists say the fall can be attributed to the Bank of Japan's decision to keep interest rates low. The difference in rates that has opened as the United States has repeatedly raised its own, experts say, has driven a sell-off of the yen as investors pile into the dollar in search of higher returns.
Aging meant slower growth of the labor force. Declining fertility combined with aging eventually reduced the domestic saving that supported economic expansion during the rapid economic growth period. Finally, monetary and fiscal policy performed poorly.
From the 1960s to the 1980s, Japan achieved one of the highest economic growth rates in the world. This growth was led by: High rates of investment in productive plant and equipment. The application of efficient industrial techniques.
Administration. The organizational structure of the two-child policy was housed under different governmental units since its conception in the 1960s.
South Koreans are having so few children that their country had the world's lowest fertility rate in 2021, even lower than the preceding year in which the nation also came in dead last. South Korean women averaged 0.81 births during their lifetimes in 2021—the sixth straight year of decline, says Statistics Korea.
Under the policy, those with more than two children will not be able to get government jobs or avail benefi ts like government housing or contest local body elections. ET Magazine takes a look at other such restrictions imposed by countries across the world and also incentives offered for people to have more kids.