Germany gets on the podium but it’s a mixed victory. Japan lost the symbolic title of the world’s third economic power to Germany in 2023, particularly under the impact of the yen’s decline, according to preliminary data on Japanese gross domestic product (GDP) published on Thursday, February 15.
Adjusted for inflation, Germany’s nominal GDP rises to $4.5 trillion in 2023, compared to Japan’s $4.2 trillion. In real data (adjusted for inflation and seasonal variations), the Japanese economy, however, grew by 1.9% last year, down from just 1% in 2022, while the German economy grew. January.
The deterioration of the economic situation in Germany means that its new title of the world’s third economic power, which had been promised to it since last October by forecasts of the International Monetary Fund (IMF), is perceived as a fraud across the Rhine. Especially since India could overtake both Japan and Germany within a few years.
In Japan, demographic decline and low productivity
An exporting powerhouse, Germany is suffering from weak external demand, energy costs for its large manufacturing sector and interest rates raised by the European Central Bank (ECB) to beat inflation.
In Japan, local media have widely commented on the loss of its third economic ranking in the world, noting that in addition to the extraordinary impact of the yen’s decline, powerful negative fundamental factors are at work, such as demographic decline. The rapid growth of the archipelago and its chronic vulnerability to productivity.
“After placing China in second place behind the United States in 2010, Japan is also now moving down to third place”. A major Japanese economic daily expressed grief Nikki In an editorial published last Saturday. “Japan has not made progress in increasing its own growth potential. This situation should be a wake-up call to accelerate economic reforms that have been neglected.”added Nikki.
Like Germany, Japan is an industrial and exporting power, but this position has long been losing momentum and its domestic consumption is currently weakened by inflation and a weakening yen.
In the fourth quarter, Japanese GDP shrank again (-0.1% in real data adjusted for seasonal variations in a quarter), the second consecutive decline after a more marked decline in the July to September period (-0.8% according to Thursday’s figure revised downwards).
