Japan’s economy is one of the strangest out of all the countries

Japan’s economy is one of the strangest out of all the countries

Why is Japan’s economy so strange? Japan’s government debt is the highest out of any major country. They literally owe 2.6 times the size of its annual economy. In comparison, the United States is at 120% which has its own problems. So, how’s Japan stable? Unlike the United States, Japan’s debt is not owned by foreign countries. It’s owned by Japanese banks and mostly the Bank of Japan. Japan basically borrows money from itself which protects it from foreign pressure. This worked great in the 1980s when Japan was an economic superpower, but banks handed out loans recklessly, and that bubble burst in the 1990s. It wiped out trillions and pushed Japan into the lost decade. But since then, growth has never really recovered and its economy has been flat for about 30 years. For decades, Japan survived because it kept its interest rates near zero. But now, its long-term bond yields are spiking to record highs. This means Japan’s going to start spending more on interest than anything else. The bill is finally coming due. But Japan’s challenge might not even be its debt. It could be demographics. Japan’s shrinking fast and it has really low birth rates and 30% of its population is over the age of 65. This means fewer workers, less tax revenue, and huge pressure on healthcare and pensions.

Japan’s economy is one of the strangest out of all the countries.

Its Debt 260% GDP
Growth has been stuck near zero for decades
Yet no economic collapse

But that might soon be changing..

#japan #economy #demographics #debt