Japan continues to be one of the “mostly free” economies. However, as reflected in the lack of progress toward greater economic freedom over the history of the Index, it continues to fall behind other countries in pursuing and implementing critical reform measures. A large and growing public debt has taken a toll on private-sector economic activity, preventing more dynamic growth. Disparities in productivity between different segments of the economy have continued to widen. Japan has lagged behind other countries in pursuing free trade agreements.