This will merely amount to maintaining positive growth over the next two decades. Japan’s economy faces a considerably strong headwind in the form of a decline in the labor force, and we need to more seriously acknowledge its implications. Raising the labor productivity growth rate further will alleviate the problem, of course.
Japan has achieved a growth rate slightly exceeding the average for the G-7 countries for the past 10 years, however, and it is not very plausible to think that we can raise it by 1 percent or more at once (Chart 11).