OECD Economic Surveys: Japan 2021
The COVID-19 pandemic hit the economy hard, provoking a marked downturn. Economic activity tumbled as sanitary restrictions restrained consumption and investment. Workers and households with weaker attachment to employment tended to be most affected. However, robust government support and the reopening of the economy led to a partial bounce back. Growth is on course to regain momentum, supported by macroeconomic policies and progress in vaccination. Fiscal consolidation was knocked off course by the crisis and debt has risen even further. A combination of fiscal consolidation and structural reforms is needed to ensure long-run sustainability in the face of demographic headwinds and the costs of meeting more ambitious environmental policy objectives. Pursuing the digital transformation may help boost productivity growth and secure fiscal sustainability. Japan is well placed to benefit from digitalisation, enjoying good infrastructure and skills, though complementary investments are needed. Policies need to facilitate diffusion of new technologies and investment in intangible assets. They also have to ensure that changing demands for skills are met by requisite education and training.
SPECIAL FEATURE: MAKING THE MOST OF DIGITALISATION FOLLOWING COVID-19
(Basic statistics of Japan, 2020)**
This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Japan were reviewed by the Committee on 8 and 9 September 2021. The draft report was then revised in light of the discussions and given final approval as the agreed report of the whole Committee on 15 October 2021.The Secretariat’s draft report was prepared for the Committee by Douglas Sutherland, Kei Oguro and Patrizio Sicari, under the supervision of Vincent Koen. Research assistance was provided by Natia Mosiashvili, and editorial support by Sisse Nielsen and Gemma Martinez.The previous Survey of Japan was issued in April 2019.Information about the latest as well as previous Surveys and more details about how Surveys are prepared is available at www.oecd.org/eco/surveys