Japan: Historic recovery continues

The current economic recovery, the longest in Japan’s post-war history, has matured into a self-sustained expansion driven by private domestic demand. The expansion is projected to continue, with growth of about 2% in 2007-08, thanks to buoyant business investment underpinned by record corporate profits and private consumption. Inflation is expected to increase only gradually.
The Bank of Japan should not raise the short-term policy interest rate further until inflation is firmly positive and the risk of renewed deflation becomes negligible. Raising the lower limit of the 0 to 2% understanding of price stability would be appropriate. The government should establish a more detailed medium-term fiscal plan while strengthening the link between the plan and the annual budget process. Further structural reform, including regulatory reform in a broad range of areas, is needed to sustain growth in the face of rapid population ageing.
Population (000s), 2005127 757
Area (000 sq km)378
GDP (Billion USD), 20053 901.6
Life expectancy at birth (Women, Men), 2004 85.6, 78.6
Total labour force (000s), 200566 500
Government typeConstitutional Monarchy
Indicators% change unless otherwise indicated
GDP growth2.82.02.0
Household savings ratio2.92.92.9
Consumer price index0.30.30.8
Short-term interest rate (%)
Unemployment rate (%)
General government financial balance
(% GDP)
Current account balance
(% GDP)
Source: OECD©OECD Observer No. 258/259, December 2006

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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