Japan could fall out of the league of developed nations by 2050 as a shrinking and greying population as well as slowing productivity make its economy contract, a think-tank has warned.
The 21st Century Public Policy Institute said a dwindling workforce, caused by a chronic low birthrate, will combine with lower savings and shriveling investment to drag the once mighty economy down.
The think-tank, linked to Japan's powerful Keidanren business federation, said the economy will start getting smaller at some point in the 2030s, even if productivity recovers to the average level of the world's top economies.
Japan's GDP will fall behind India in 2014 and by 2050 it will lose its economic presence 'significantly', dipping to be only one sixth that of China and the United States and one third that of India, said the report.
Citation: http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_790474.html
Since 1960s, when Japan had great economic growth, Japan has been one of developed countries. And, before Asia NIES developed in 1980s, Japan was only a developed country in Asia.
But, according to this estimation, Japan will be out of developed countries by 2050.
What happens when Japan is categorized as a developing country?
・Suburbs around metropolitan areas can be ghost towns. This is because no one can earn enough money to buy houses in such areas ,and employers won't pay money for employees' commuter passes, and shrinking population accelerates the trend.
・When we take a look at downtown areas, there are full of low income workers living near workplaces. Each of them lives by himself/herself, because they can't afford to marry and to grow children.
・Those who can make children are limited in the rich. So, fertility rate goes down under 1.00.
