2023-10-24 16:12:22
A weak national currency compared to the dollar, wages which have stagnated for thirty years, a working population which is declining. Due to the accumulation of all these factors, Japan’s nominal GDP is expected to decline by 0.2% this year compared to 2022 to reach $4,230 billion (€3,984 billion), according to the latest projection from the International Monetary Fund (IMF) reported by the Japanese newspaper Asahi Shimbun. Notably, Japan should officially lose its place as the world’s third economic power to Germany. German GDP is projected to grow by 8.4% to $4,429 billion (€4,172 billion) in 2023.
As the newspaper notes, this would be a highly symbolic event. In 1968, Japan, then in full growth, had supplanted West Germany as the second largest economic power in the world – it lost this status in 2010, overtaken by China. Germany now overtakes the archipelago, although its population (83 million inhabitants) represents only two thirds of that of Japan (124 million inhabitants).
Loss of international influence
Asahi Shimbun sees the weakness of the yen as one of the major causes of this decline: its value once morest the dollar has fallen by 27% since the start of 2022, and inflation has hit Japan more severely than Germany .
However, the Japanese economy has been stagnating for years: “Even in terms of real GDP, the German economy grew by 1.2% per year on average between 2000 and 2022, while the average annual growth rate stands at 0.7% for Japan,” notes the journalist.
Yuichi Kodama, économiste au Meiji Yasuda Research Institute interviewed by the press agency Bloomberg, fears that this slowdown in growth will lead to a loss of influence for the country:
“When it comes to presence on the international scene, the economic dimension is important. In the medium and long term, Japan may become a country without influence.”
As for Saisuke Sakai, also an economist, quoted by the newspaper Yomiuri Shimbun, he advocates “a change of perspective”. “The weak yen should be leveraged to strengthen industries for foreign visitors. Developing a modern personal assistance service and then exporting it to other countries would also be an idea to strengthen growth.”
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