Leading to a protracted slump, the price level decline in Japan was nevertheless considerably weaker than the fall in prices in most countries during the Great Depression. Falling below zero in 1995, the inflation rate remained negative, until 2005, averaging 0.1% p.a.. On the other hand, overall production did not suffer as much during this period.
From its previous peak in 1990, of above 5%, GDP growth declined to a standstill in 1992-1993. Between 1995 and 2007 Japan’s per capita GDP grew at an average yearly rate of only 1.2%, against 1.8% in the euro area and 1.9% in the US. Looking at the current situation, inflation reached a peak only a few months ago.