Japan’s population is declining rapidly

Japan’s population shrank by nearly one million in 2015-2020, according to a five-year census. The number of people of working age is declining faster, which affects the economy of the Land of the Rising Sun.

On October 1, 2020, Japan’s population reached 126.146 million, according to data from the Ministry of Communications and Internal Affairs released on Tuesday. That’s roughly 950,000, or 0.75%, less than five years earlier.

The number of children under the age of 15 has fallen by nearly a million to less than 15 million. Meanwhile, the number of people over the age of 64 has increased by more than 1.5 million. The main factor of the economy is the intergroup, i.e. the population of working age (15-64). This shrunk by as much as 4.43 million in just 5 years. This represents a decrease of approximately 6%.

Demographic problems halted Japan’s dynamic economic growth, which quickly bridged the decades-old gap between Japan and the USA, and was one step closer to becoming the world’s largest economy. At the beginning of the 1960s, Japan’s GDP was less than 10%. The gross domestic product of the United States – in 1995 it was already 72.5 percent. But in the second half of the 1990s, the working-age population in the Land of the Rising Sun began to decline and the economy virtually stopped growing. Neither exceptionally expansionary monetary policy nor fiscal policy helped stimulate the economic situation. Suffice it to remember that the Japanese are the precursors of quantitative easing, which is common today, and their public debt is close to 240%. GDP, the highest score in the world.

By the way, it is worth noting that at the end of last year, the official GDP of China accounted for about 70 percent. The GDP of the United States and the Middle Kingdom is grappling with similar problems to Japan three decades ago – a real estate bubble, a shrinking working age, and huge debt.

Japan’s GDP is growing at all, it’s completely rickety, but in terms of productivity, the Land of the Rising Sun is working at least decently for an economy at such a high level of development. Comparing the growth rate of GDP per capita for people of working age, Japan has performed better in the last decade than, say, Germany or the United Kingdom, and not much worse than the United States.

Maciej Kalwasiński

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