Japan’s ageing, shrinking population

Whichever party wins Japan’s August 30 general election must deal with a population forecast to shrink and age rapidly, because of the country’s low birth rate, high life expectancy and aversion to immigration.
Following are some facts about Japan’s population trends.

* Japan is currently the world’s 10th-largest country in terms of population, with more than 127 million people. By 2050, it is forecast to rank 18th, with 93.7 million, according to the U.S. Census Bureau.

* That compares with Russia’s population, which is also forecast to fall from 140 million in 2009 to 109.2 million in 2050, knocking it from 9th position to 16th.

* Japan’s population dependency ratio, or the number of people of working age supporting each elderly person, stood at 3.3 in 2005, but will fall to 1.3 by 2055 according to the National Institute of Population and Social Security Research.

* An IMF study calculated that Japan’s real GDP would fall by a cumulative 20 percent over the next century, compared with a baseline simulation with a stationary population.

* The Health Ministry forecasts pension costs will rise to 56 trillion yen in 2015, compared with 39.5 trillion yen in 2006, while health care spending is expected to rise to 37 trillion from 27.5 trillion in 2006. Some in the ruling Liberal Democratic Party (LDP) say consumption tax will need to be raised from the current five percent in future to fund rising social security costs.

* Defense spending has been falling annually from a high of 49.4 trillion yen as social security takes an increasing share of the budget. It will likely fall further and Japan may have trouble staffing its [constitutionally illegal] military due to the shortage of young people.

Sources: U.S. Census Bureau, IMF, National Institute of Population and Social Security Research, Ministry of Health and Welfare, Defense Ministry, Pacific Forum CSIS