Bloomberg News

Japan Population Falls by Record in Challenge for Abe’s Campaign

January 02, 2014

A man and a Child

A man and a child walk along a footbridge past residential buildings in Yokohama. Photographer: Akio Kon/Bloomberg

Japan’s population declined by the most on record in 2013, highlighting the demographic challenges faced by Prime Minister Shinzo Abe in his campaign to revive the world’s third-biggest economy.

The population fell by 244,000, according to Health Ministry estimates released yesterday, a seventh straight year of decline. Births fell about 6,000 from a year earlier to 1,031,000 and deaths increased about 19,000 to 1,275,000.

Rising welfare costs for an ageing nation threaten to worsen a debt burden that is already twice the size of the Japanese economy. At the same time, a shrinking population caps consumer demand, making it harder for Abe to drive an exit from 15 years of deflation.

The government’s decision to raise a sales tax to 8 percent from 5 percent in April is aimed at helping to secure funds for social welfare payments. That move threatens to undermine the momentum building in the economy from unprecedented monetary stimulus.

To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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