Japan Shows How to Defeat Secular Stagnation
The Land of the Rising Sun’s per capita GDP is the envy of the Group of Seven and a gift to global investors.
Japan’s economy is shining again.
Photographer: Kazuhiro Nogi/AFP via Getty Images
As if out of nowhere, everyone's archetype of secular stagnation is leading the Group of Seven developed economies in life expectancy, per capita growth and, for the first time in decades, an end to the deflation that oppressed chief executive officers and global investors alike. And if that’s not enough, this economic juggernaut – better known as Japan – is also providing the biggest dollar-denominated stock market returns anywhere in the world.
The Land of the Rising Sun experienced its largest decline in population last year, or more than 500,000 annually to 125.4 million, and residents are living longer than 84 years on average (fourth among 240 countries). And yet, the No. 3 economy had the most significant per capita increase in gross domestic product between 2013 and 2022 in local currency terms. That 62% appreciation to 4.72 million yen ($32,000) as the size of its society shrank 2% easily surpassed the US (16% with a 6% rise in population), Canada (45% and 12%), UK (48% and 5%) Germany (32% and 5%), France (33% and 3%) and Italy (30% and -1%), according to data compiled by Bloomberg.