OECD Observer
Country snapshots 2017-18: Japan
Structural reforms essential

Economic growth is projected to reach 1% in 2017 before slowing to 0.8% in 2018, boosting headline inflation to 1.25% by the end of 2018. With three supplementary budgets in 2016, fiscal consolidation is pausing, helping Japan to cope with the impact of the yen appreciation. Private consumption is projected to continue rising in the context of labour shortages and the historically high level of corporate profits. 

The Bank of Japan should maintain monetary easing, as intended, until inflation is stable above the 2% target, while taking account of costs and risks in terms of possible financial distortions. Structural reforms are essential to boost productivity and bring more people, especially women, into employment. This would enhance social cohesion, and reduce Japan’s high relative poverty rate. Faster growth is critical to stopping and reversing the run-up in public debt, which is projected to reach 240% of GDP by 2018.       

GDP growth


Current prices JPY trillion




% real change




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©OECD Observer No 308 Q4 2016