Despite difficulties… Germany surpasses Japan to become the third largest economy in the world
The Japanese economy achieved growth by 1.9% last year, according to what official data showed Thursday, but Germany nevertheless surpassed it to become the third largest economy in the world, mainly due to the sharp decline in the value of the yen.
Government data showed that Japan’s nominal gross domestic product for 2023 reached $4.2 trillion, compared to $4.5 trillion for Germany, according to figures revealed last month.
The yen fell by more than 18% in 2022 and 2023 against the dollar, including about 7% last year only, in part because the Bank of Japan, unlike other major central banks, maintained negative interest rates.
The Japanese and German economies rely heavily on exports, and although both face major obstacles, Japan suffers more than Germany due to its severe labor shortage and the decline in its population.
India, with its young society and high growth rates, is expected to overtake them to become the world’s third-largest economy after the United States and China later this decade.
The Japanese economy contracted by 0.1% in the three months to December, according to preliminary data issued by the Cabinet, contrary to expectations of growth of 0.2%.
According to official data, this is the second consecutive quarterly decline in production, after recording a contraction of 0.8% in the quarter from July to September.
