Is Japan Whistling Past the Demographic Graveyard?

Takeaway: Prime Minister Abe has his head in the sand on Japan's demographic trends.

Is Japan Whistling Past the Demographic Graveyard? - Abenomics unicorn cartoon 09.24.2015


Prime Minister Shinzo Abe remarked today that Japan's aging population was not a burden on its economy. It's an incentive.




When asked about the 34.6 million people aged 65 and older, or 27.3% of the population (highest proportion among advanced nations) Abe told the crowd, "I have absolutely no worries about Japan's demography."


"Japan may be aging. Japan may be losing its population," he said. "But these are incentives for us. Why? Because we will continue to be motivated to grow our productivity." The prime minister cited robots, wireless sensors, and Artificial Intelligence as among the bastions of support for future Japanese growth.


"So, Japan's demography, paradoxically, is not an onus, but a bonus," Abe said.

Ok, enough.


Here are the facts from our Macro team's 99-page 3Q16 Macro Themes deck. It all boils down to the fact that an aging country that is steadily losing its core consumption cohort, people ages 35 to 54 years old, will find itself mired in slow growth. Our Macro team has labelled Japan's dire economic circumstances over the coming ten years as "plunging into the abyss."


As you can see in the chart below, despite Abe's handwringing, the outlook isn't good.


Is Japan Whistling Past the Demographic Graveyard? - japan demographics

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