The gross domestic product of Japan grew by 1.9% in 2023, but the Asian archipelago was surpassed by Germany as third world economy due to the strong yen devaluation.
At the exchange rate in US dollars, Japan closed 2023 with a GDP nominal 4.2 billionbelow the 4.5 billion from Germanyaccording to statistics published by their respective administrations.
In the last quarter of 2023, the Japanese economy contracted 0.1%according to preliminary data published by the government, which falls short of the market expectation of 0.2% growth.
It is the second straight quarter of contraction after the -0.8% recorded between July and September, according to revised government data.
Germany rises one step but the economy cools
The German economy is also not on the right track and recorded a contraction of 0.3% of its GDP in 2023according to official data published in January.
Exporting power such as Japan, Germany suffers from weak foreign demand, the increase in the energy bill for its industry and the high interest rates imposed by the European Central Bank to curb inflation.
This situation makes the title of third world economy, anticipated since October by the International Monetary Fundis not perceived with great enthusiasm in the German population.
Besides, The honor may be short-lived because India, now the most populous nation in the world, may overtake both Germany and Japan in the coming years. and stand alone behind the United States and China.
Japan loses ground in the world economy
Whereas in Japan, The local media echo this change and highlight, in addition to the devaluation of the yen, other factors such as the rapid demographic decline in the archipelago and its chronically low productivity.
“After having lost second place to China behind the United States in 2010, Japan is now also leaving third place”lamented the main Japanese economic newspaper Nikkei in an editorial last week.
“Japan has not made progress in increasing its own growth potential. This situation is a warning signal for accelerate economic reforms that have been ignored,” he added.
The Bank of Japan has chosen to maintain his ultra-flexible monetary policy and the negative interest ratescausing the yen to depreciate more than 18% against the dollar in the last two years.
Like Germany, Japan is an industrial and exporting power that suffers from the uncertain global economic situation.
But this status has been degraded for some time while domestic consumption has not recovered, undermined by inflation and the fall of the yen.
Source: Ambito
