Japan No Longer World’s Third Largest Economy

Japan Currency
Avatar of Harry Johnson
Written by Harry Johnson

Japan’s GDP by the end of 2023 amounted to $4.2 trillion, while Germany’s GDP reached $4.5 trillion in dollar terms.

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According to the latest official data, Japan has lost its position as the world’s third largest economy after unexpectedly falling into recession at the end of last year. As of now, Germany has taken over the third spot in terms of nominal GDP.

The fourth quarter of last year saw a contraction in GDP of 0.4% on an annualized basis, marking a decline from the previous quarter’s 3.3% slump. This result was unexpected as market predictions anticipated a growth of 1.4% during the final three months of the year. In broad terms, a technical recession is characterized by two consecutive quarters of economic contraction.

Private consumption experienced a 0.9% annualized decline in the fourth quarter, while corporate investment saw a 0.3% decrease. On the other hand, exports demonstrated a growth of 11%, while imports witnessed a rise of 7.0%.

A government official reported a stagnation in service consumption, ongoing rise in goods prices, and lackluster clothing consumption from October onwards, attributed to the mild winter.

Private consumption, which constitutes over half of Japan‘s economic activity, experienced a 0.2% decline due to the increasing cost of living and the decrease in real wages faced by Japanese households.

Japan’s GDP by the end of 2023 amounted to $4.2 trillion, while Germany’s GDP reached $4.5 trillion in dollar terms.

“Even with potential revisions that could alter the final figures, two back-to-back GDP contractions and three consecutive declines in domestic demand are unfavorable developments,” stated Stefan Angrick, a senior economist at Moody’s Analytics. “These circumstances make it more challenging for the central bank to rationalize an increase in interest rates, let alone a sequence of rate hikes.”

WHAT TO TAKE AWAY FROM THIS ARTICLE:

  • On the other hand, exports demonstrated a growth of 11%, while imports witnessed a rise of 7.
  • A government official reported a stagnation in service consumption, ongoing rise in goods prices, and lackluster clothing consumption from October onwards, attributed to the mild winter.
  • The fourth quarter of last year saw a contraction in GDP of 0.

About the author

Avatar of Harry Johnson

Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for mroe than 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

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