Title: Why is Japan's economy shrinking? | World Economic Forum
Headings: Why is Japan's economy shrinking?
Why is Japan's economy shrinking?
What’s the problem?
What’s causing it?
What is Abenomics?
What does that look like in reality?
So what happens next?
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Content: But after a promising start, Abenomics appears to be faltering. The new figures show that the economy shrank between October-December last year with slower exports and weak domestic demand being blamed for the contraction. What’s causing it? Japan's economy stagnated in the 1990s after its stock market and property bubbles burst. Companies focused on cutting debt and shifting manufacturing overseas. Wages stagnated and consumers reined in spending. Once deflation set in consumers started to expect prices to fall and they delayed spending for as long as possible in order to save money. That perpetuated the problem and continued the cycle. Japan’s ageing population is now making the problem even worse. By 2020 the country will be losing around 600,000 people a year.