Japan’s economy, once a model of prosperity, is facing significant challenges. In 2024, Japan fell from its position as the third-largest economy to fifth, overtaken by Germany and potentially India. This decline is attributed to weak long-term growth, demographic challenges, and a depreciating yen.
Household consumption, which accounts for over half of Japan’s GDP, remains sluggish despite wage increases. Inflation has eroded purchasing power, with real wages stagnating. Demographic issues, including an aging population and a declining workforce, further strain the economy. Japan’s public debt, at nearly 250% of GDP, poses additional risks.
The Bank of Japan has shifted away from ultra-accommodative monetary policies, raising interest rates. However, this has led to concerns about fiscal sustainability. Meanwhile, Japan’s stock market has surged, with the Nikkei 225 reaching its highest level since 1989, driven by corporate reforms and foreign investment.
To revive its economy, Japan may need radical reforms, including pro-natal policies, deregulation, and increased immigration.
— news from FXStreet
— News Original —
¿Qué salió mal con el milagro económico de Japón?
La economía japonesa, durante mucho tiempo un modelo de prosperidad y disciplina fiscal, está atravesando un período de turbulencia compleja. Entre una contracción en su Producto Interior Bruto (PIB), una crisis del consumidor, tensiones comerciales y debilidades estructurales, la quinta economía más grande del mundo parece estar atrapada en una espiral que es difícil de detener…