November 25, 2014

6 facts about Japan’s downbeat economy

Japan's growing number of older people will put more and more pressure on the working-age population for years to come. (AP Photo/Shizuo Kambayashi)
The growing number of older people in Japan may put more and more pressure on the working-age population. (AP Photo/Shizuo Kambayashi)

Japan is a long ways away from the skyrocketing growth the country enjoyed during its post-World War II “economic miracle.” Last week’s lower than expected GDP figures showed Japan slipping into its sixth recession since the 1997 Asian financial crisis.

The world’s third largest economy also faces longer-term challenges, including pessimistic forecasts from the Japanese public, the hollowing out of Japan’s working-age population and the nation’s exorbitant public debt.

Here are six facts about Japan’s economic gloom:

1Japan’s optimism about its economic future nosedived earlier this spring, according to year-over-year data. Just 15% of people in Japan expected the country’s economic situation to improve in the “next 12 months,” down from 40% who were similarly hopeful in spring 2013, after Prime Minister Shinzo Abe took office. That’s the smallest share expecting improvement in any of the 44 countries we surveyed.

2Japan's Public Debt WorryTwo-thirds (67%) of the Japanese see the public debt as a very big problem, according to our survey conducted before April’s tax increase. The primary reason for this hike, from 5% to 8%, was to rein in the national debt, which had ballooned to over 240% of Japan’s GDP. More Japanese see public debt as a “very big problem” than they do the lack of employment opportunities (45%), inflation (31%) or economic inequality (28%).

3Japan’s working-age population (ages 15 to 64) is expected to plummet to 55.2 million in 2050 from 81.2 million in 2010, a 32% decline, according to UN data. In 1970, 69% of Japan’s population (71.4 million) was of working age, compared with 64% in 2010 and just 51% projected in 2050.

Japan's Aging Population

 4Japan's Aging PopulationMeanwhile, the country’s population is getting old, fast. Japan’s elderly population is expected to grow to 39.6 million in 2050 from 29.2 million in 2010, a 35% increase. The country’s median age is expected to rise to 53 from 45.

These trends are going to put a lot of pressure on Japan’s working-age population down the line. By 2050, there will be 72 elderly people (ages 65 and older) for every 100 people of working age, doubling the 2010 ratio of 36 per 100. Indeed, Japan’s old-age dependency ratio is among the highest in the world. Looking at other top economies, Japan’s not alone. Germany’s ratio is projected to be 60 per 100 in 2050, France’s is 44, China’s is 39, and the U.S.’s is 36.

5While unfavorable demographics don’t necessarily portend economic doom, more than eight-in-ten (87%) in Japan view the growing number of older people in their country as a major problem, according to our spring 2013 survey. By comparison, 67% in China see this as a major problem, as well as 55% in Germany, 45% in France and 26% in the U.S.

6Japan’s rapid aging may also be become a social and economic burden for today’s children (or tomorrow’s workers). Just 14% of people in Japan say that children today will be better off financially than their parents. That’s among the most pessimistic views in all 44 countries we surveyed.

Topics: Asia and the Pacific, Demographics, Economic Recession, World Economies

  1. is an associate digital producer at Pew Research Center.


  1. Edward Spalton2 years ago

    People look at GDP relative to other countries as the be all and end all.
    But surely it is domestic product PER HEAD of population which is a better indicator of national prosperity.

    From the Fifties onwards the UK accepted increasing levels of immigration to fill perceived labour shortages.

    Japan decided to remain an homogenous nation and invested more heavily in advanced automation. One result is that there are Japanese cars all over the world and no longer any British owned volume car manufacturers.
    Britain can no longer exercise any control over immigration from EU countries and the previous Labour government deliberately opened the flood gates to Third World immigration, affectively “electing a new people” which, they calculated, would be inclined to vote for them.

    People are not merely units of production and consumption. There is no particular advantage to the individual in living in a country with the biggest economy, if income per head declines. There are also huge social problems, caused by large scale immigration of peoples whose culture and loyalties are far different to the host country.

    In evidence to the House of Lords Committee on immigration, Peter Sutherland ( former EU Coomissioner, former head of WTO, Goldman Sachs panjandrum and UN chief of migration policy) said that the EU should increase migration ” to break up homogenous people’s” . This is social engineering on a massive, global scale. But for whose benefit? Certainly not the host population. Such a policy could never have been enforced by democratic means.
    It is massively arrogant.

  2. Orlando coombs2 years ago

    Japan is a sinking ship.

  3. Vincenzo Lo Scalzo2 years ago

    The scenario remains clearly represented. It suggests a revision of drivers and references to confront quality of life with primary demand deriving from the age trend.

  4. Richard McLean2 years ago

    Japan is a hide bound country unwilling to open its door to immigrants. Unless it can open it eyes (and its doors) to the rest of the world, it will lose its chance to take advantage of its great potential as an industrial and cultural power.

    Ultimately it will be the young people who force this change. They must.

    Richard McLean (Great friend and admirer of Japan and its people from personal contact.)