Aug 20, 2017 (Japan Times) - Japan has served its time as a symbol of economic failure. Its latest growth surge puts it in a welcome new role.
The country's demographics, according to conventional wisdom, are supposed to be bad for the economy. Instead, Japan unexpectedly shot to the top of Group of Seven club, with its gross domestic product notching 4 percent annual growth last quarter. That easily outpaced the 2.6 percent recorded in the U.S. during the same period.
The biggest gains were in consumption and business spending, both essential ingredients in sustaining the nation's expansion. The world's third-largest economy, Japan could be in even better shape if Prime Minister Shinzo Abe could overcome ancient tradition and political opposition by welcoming large-scale immigration.
To get a sense of the potential of a larger population, take a look at the consumption figures. The GDP jump happened despite anemic increases in wages at the biggest employers, and despite the central bank's continuing struggle to fully escape decades of either very low inflation or deflation.
The increase in spending also defies demographic destiny. Japan's population is aging and shrinking, having peaked in 2009. The prime-working-age population, people ages 15 to 64, peaked more than a decade earlier and is down about 13 percent since then.
