Unconventional wisdom for Japan's outlook

Economic strategist argues that Japan''s declining population will not impact the economy as early as many have been predicting.

Most experts, including the Japanese government and the UN, estimate that Japan's population currently 127 million will peak by 2007, and then fall steadily to 100 million by 2050. An ageing population with a declining growth rate has some dire implications for Japan's long-term economic growth, and is thus negative for investing in Japan.

However, a detailed analysis of the population age distribution and factors behind the declining population growth trend shows a somewhat benign and counter-intuitive, medium-term outlook in the next 30 years before the dire long-term outcome plays out in over 30 years' time. In particular, Japan's overall labour pool will rise, due to rising participation rate...

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