Japan Shows Its Economy Can Grow Even as the Population Shrinks

(Bloomberg) -- Don’t write off Japan yet.

Despite its aging and shrinking population, the country has chalked up seven straight quarters of economic growth. And taken on a per capita basis, Japan is holding its own with other global economic heavy weights.

For a detailed account of its third-quarter national accounts released earlier on Wednesday, click here. To see how Japan is performing against its rivals in some key per capita and nominal measures, read on.

On a per capita basis, the falling population is actually helping Japan by this metric, especially with overall GDP still ticking higher. It should be noted that the apparent drop off in the chart above around the time Prime Minister Shinzo Abe came to power largely reflects currency conversion of the yen into dollars. The policies Abe favored depreciated the yen, which has been a boon for exporters and the economy.

When it comes to nominal changes in the size of GDP, as shown below, China is clearly in the ascendancy. And although the U.S. and Europe have also established a lead over Japan, its economy is still getting bigger every year.

Looked at in isolation, the steady gains in Japan’s nominal GDP are noteworthy, and have seen the economy expand to a record 545.8 trillion yen ($4.8 trillion). Abe’s goal to create a 600 trillion yen economy doesn’t look like it will be achieved in the next few years, but things are moving in the right direction.

©2017 Bloomberg L.P.