Japan's economy has been stagnant for several decades, with a GDP growth rate of less than 1% per year. This is due to a number of factors, including an aging population, a declining birth rate, and a lack of innovation.
Deflation
Deflation is a continuous decrease in the general price level of goods and services. This can lead to a number of problems, including reduced consumer spending, increased debt, and a decrease in investment.
Government Debt
Japan has a large amount of government debt, which is currently more than 200% of its GDP. This makes the country vulnerable to financial shocks and makes it difficult to borrow money for investment.
Trade Deficits
Japan has had trade deficits for many years, which means that it imports more goods and services than it exports. This can lead to a decrease in the value of the yen and make it difficult for Japanese businesses to compete in the global market.
Population Decline
Japan's population is declining, which is expected to continue in the future. This can lead to a number of problems, including a shortage of workers, a decrease in consumer spending, and a reduction in tax revenue.