In recently years, dramatic changes in economic and social environment, such as aging population, globalization of economic activities, and so on, have increased uncertainty about the future of local areas in Japan, including Chugoku region. As a result, it has become more important than ever for each region to have its own vision for the future of the economy and society. This paper presents a newly developed "regional econometric input-output model for Chugoku region (CREIM)" that can produce a long-term outlook for the Chugoku region's macro-economy and industries. Unlike conventional models, this model enables analysts to make forecasts of detailed structural changes in the inter-industry relations in the Chugoku region's economy, along with ordinary macro-economic projections, with input-coefficients changing endogenously every year during the projection period. Using the model, we carried out a forecast for the period 2002–2030.
The results reveal that the projected average annual growth rate of real GDP in Chugoku region is 0.93% during 2002–2030. While private final consumption expenditure and housing investment will be getting depressed, external demand-led growth is expected in Chugoku region, especially in the leading industries such as chemical products, petroleum and coal products, iron and steel, general machinery, electrical machinery and transportation equipment, due to the continuous expansion in world trade.