Following years of subdued growth, the Japanese economy registered a good rebound in 2021, with a real GDP growth of 2.1%. The country’s reopening and the consequent boost to household consumption and consumer spending were key growth drivers of 2022’s estimated 1.1% growth. However, soaring energy and food prices have weighed on Japan’s fiscal health as the government absorbed the price shocks through subsidy support. A $200 billion fiscal support package has also been announced with the aim of driving demand and investment momentum in 2023. Against the backdrop of slowing global growth forecasts in 2023, how will the export-driven Japanese economy fare in 2023 and beyond? Can increased fiscal spending, ultra-loose monetary policy, and a conducive business environment support the medium-term growth momentum of Japan’s economy, even under the weight of an ageing population and a shrinking labor force?

This Japan-centric macroeconomic thought leadership provides a growth snapshot of the country through the identification of growth conditions. A key feature of this piece is the focus on Japan’s social scenario and how businesses can leverage long-term trends and policy reforms to drive sustainable investment opportunities in various industries. This piece also covers crucial macroeconomic sections that will provide an in-depth analysis of the country’s social outlook and global positioning.