Japan – National Debt

Globally, Japan has one of the largest gross domestic products, making it among the largest economies in the world. 

Below is a graph analysing the trends of Japan's national debt as a percentage of their national gross GDP. In 2019, Japan had around $12.2 trillion USD in debt, which is around half the debt that the United States owes, however, in relation to the size of its economy, it is huge as it is around 240%. 

The global coronavirus epidemic has forced Japan to secure a large loan to support its citizens – for the fiscal year starting in April 2021, there will be a $1.03 trillion budget draft for the epidemic. 

Other than the global epidemic, wherein countries need to respond to their citizens' needs, Tokyo (Japan's capital) hosted the 2020 Olympics. This has caused Japan an estimated $15 billion USD. These costs included displacement costs (many Tokyo public housing were demolished to make room for the stadium). Many countries that previously hosted the Olympics also had increased costs other than the initial costs needed for hosting the games.

This current fiscal year, Japan will be issuing new Japanese government bonds (JGBs) worth approximately $1.018 trillion USD, more than double the amount in fiscal 2009 when the global financial crisis was occurring. Currently, the priority is to lessen the economic impact of the epidemic, as well support the citizens and pay COVID-related costs, however, the government is not yet thinking of how to pay the debt back. 

 

Japan – Well-being

 Japan performs well in some measures of the OECD Better Life Index Ranking. They rank top at personal security. The ranks for income and wealth, education and skills, jobs and earning, housing, personal security and environmental quality are above the OECD average, however, they are below the average in rankings in regards to civic engagement, subjective well-being, social connections, work-life balance and health status. Japan is in the 56th place for the Happiness Index Ranking, an improvement from their 2020 ranking of 62nd. 

In terms of eco-friendliness, Japan has a score of 28.3 in the Happy Planet Index, ranking 58th out of 140 countries. They are in the lower quartile in terms of scores. Although their life expectancy (83.2 years old) and well-being (6/10) is alright, their ecological footprint is high, at 5 global hectares per person. The inequality in Japan is quite low, at 9%.

Japan, financially as a country, does well. Japan has one of the highest GDP per capita in the world, as they score high on traditional factors of life quality (income, wealth, education, jobs, earnings, housing and personal security – which all positively correlate with each other.) However, there seems to be a lack of connection between society with one another. They are lower in civic engagement, subjective well-being, social connections, work-life balance and health status. They could focus on this to improve overall life quality for citizens in Japan.

Japan – Economic Growth

Context

Japan is a country in East Asia with a population of 126.3 million (World Bank, 2019).

Its economy has been stale over the last decades,

however a three-pronged strategy introduced by Prime Minister Shinzo Abe – inevitably dubbed “Abenomics” –

has stabilised the yen exchange rate,

fattened the stock market, boosted corporate investment and encouraged the public to go out and spend.

GDP Analysis

From the early 90s until early 200s, Japan was in ‘The Lost Decade’, real GDP only grew by 1.14% annually.

From 2000 to 2020, in the span of two decades, Japan has experienced two recessions.

2002 to 2008 showed a slow and steady economic growth, however, during 2008,

real GDP plummeted drastically due to the Economic Crisis of 2008.

Japan was relatively immune as many banks did not have much of RMBS and CDO in their portfolio,

however, the decrease in exports surrounding the economic crisis,

the appreciation of yen since the outbreak of the Lehman Brothers issue, the stagnation of

the financial market triggered this.

Whilst they were able to recover with higher GDP, Japan fell again into another recession in 2020

due to the outbreak of COVID-19.

The recession was also mainly due to a severe decrease in domestic consumption,

which accounts for more than half of Japan’s economy. 

For the past two decades, Japan followed the standard business cycle as it has gone

through a recovery, boom, recession, trough within decades. 

Real GDP for Japan (https://fred.stlouisfed.org/series/JPNRGDPEXP) 

Real GDP Growth for Japan (https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&locations=JP&start=2000) 

GDP per capita for Japan (https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=JP)