The report suggested that the reason the domestic economic growth rate declined drastically after the 2000s was the extended depression of domestic demand. The depression of domestic demand is due to the aggravation of facility investment and employment environment. Due to the influence of the European financial crisis and the depression of domestic demand, the domestic economic growth rate of 2011 and the first quarter of 2012 were only 3.6% and 2.6% respectively, and business recovery is expected to be delayed. In the respect that the features of the domestic economy contraction are similar to the patterns of Japan's long-term domestic economy depression since the 1990s, preparation of a systematic long-term solution is needed immediately. It is important to create jobs through the activation of knowledge-based service industries for the expansion of the domestic economy. It is essential to create jobs in high added value industries through the advancement of the medical industry, globalization of the cultural contents industry, active expansion of infrastructure for procuring East Asian tourists, reinforcement of the competitiveness in the social service industries, etc. The trickle-down effect should be strengthened by intensifying the connectivity between export industries with global competitiveness and domestic consumption industries. The competitiveness of capital goods, intermediary goods, along with domestic parts and materials should be intensified so that the accomplishments of exporting enterprises can be routed into domestic consumption industries. Facilitate mutual growth of small and medium enterprises with a high rate of market share in the sectors of parts and materials and major global companies that have their own technological development skills.

Macro-Economic Analysis Division