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Japanese will turn from savers to spenders

Thursday, February 19, 2015


Demographics and the effect on the savings rate.


Recently published national income accounts show that Japan's households in 2013 spent more than their disposable income -- that is, their savings rate was negative. Economists have predicted the decline of Japan's savings rate for many years. The surprise has been its speed.


  • Current account surpluses will be pushed towards zero for the foreseeable future, and the trade balance tend towards deficit.
  • Despite lower national savings, there is no sign that foreign buyers treat Japanese government securities as anything but safe havens.
  • Demand for healthcare, pharmaceuticals, retirement communities and related services will grow as retirees draw down their savings.
  • These sectors therefore number among the 'growth industries' that the Abe government will attempt to encourage.

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