Population fall will affect Japan despite policy moves

Significance

A shrinking population and falling share of the population of working age are major factors influencing developments in the economy and society in the short and long term.

Impacts

• Tokyo will try harder to reverse the falling birth rate and attract more foreign workers into the labour force.
• Growth will suffer from the negative impact of a contracting population on domestic demand.
• Japan’s share of global GDP will continue falling, weakening the country’s position in the global economy.