2019 Reports

Japan’s Economy: Stable, with Modest Sustained Change

Patrick, Hugh T.

Overall, the Japanese economy continues to do well, despite a blip in the first quarter of 2018. There have been no big domestic surprises, and none are likely. In 2017, GDP increased 1.7 percent, greater than estimated potential or projected. GNP per capita, in some ways a better measure than GDP growth since Japan’s population is declining, increased by almost 1.9 percent. Unemployment continued to decline to 2.5 percent in July. Deflation has ended, but the major macroeconomic shortfall is that the 2 percent consumer price index (CPI) annual increase target has not been achieved. And it is not likely to be achieved any time soon. At the macro level, improvement is incremental and gradual. Indeed, this reads very much like my essay a year ago.