Why did the IMF expect Japan to witness a real GDP decline of 25 percent?

The International Monetary Fund said on Wednesday that Japan’s real gross domestic product could decline by over 25 percent in the next 40 years due to the aging population. The IMF said in its annual report that structural reform is essential to "navigate Japan’s demographic headwinds".
    "The rapid aging and shrinking of Japan’s population will dominate economic policymaking in coming decades," the report said, noting that although Japan’s Prime Minister Shinzo Abe’s economic policies had brought some positive results in the past six years, strengthened policies are required to achieve sustained high growth and durable reflation.
    Among solutions to tackle the demographic issue, the IMF listed reducing wage gaps, encouraging women to join the workforce and allowing more foreign workers to help plug labor shortages.
    On Wednesday, the House of Councilors of Japan started the debate on a bill to accept more foreign blue-collar workers after the ruling Liberal Democratic Party pushed it through the lower house of parliament despite rising concerns from the opposition.
    It is reported that tens of thousands of workers from other countries will be drafted into industries with staff shortages like electronics, food production, construction and particularly nursing, if the bill is passed.
    Yoshikazu Kato, adjunct associate professor at Asia Global Institute of the University of Hong Kong, said the Japanese government had made great efforts to deal with the population decline, including having more women in the cabinet, but there are other things that can be done.
    "Building more internationalized universities to attract talented young people from around the world can be an effective way as the demographic trend intensifies," Kato said. "In this way, students could have time to learn skills and Japanese at the same time to fit better into local society."
    The IMF expected the Japanese economy to register 1.1 percent growth this year but slow down to 0.9 percent in 2019 due to the planned consumption tax increase to 10 percent from the current 8 percent in October next year.