Germany overtakes Japan as the world’s third largest economy. The Japanese government reported that the economy shrank by 0.4 percent year-on-year in the fourth quarter of 2023.
Although Japan’s GDP grew by 1.9 percent throughout 2023, it fell in both the third and fourth quarters by 2.9 percent and 0.4 percent respectively. Japan’s GDP amounted to USD 4.2 trillion last year, while Germany’s was USD 4.4 trillion. This means that Germany now overtakes it as the world’s third largest economy.
While a weaker yen is believed to be one reason for the decline, economists say it also reflects a declining population with lagging productivity and competitiveness. This is likely to result in Japan having a smaller presence in the world, says Tetsuji Okazaki, professor of economics at the University of Tokyo.
– Several years ago, Japan boasted a powerful auto sector, for instance. But with the advent of electric vehicles, even that advantage is shaken, he said to AP News. Many factors have yet to play out, But when looking ahead to the next couple of decades, the outlook for Japan is dim.
Japan has historically been described as “an economic miracle”, becoming the second largest economy after the US after World War II. This continued throughout the 1970s and 1980s. Japan’s economy was the second largest until 2010, when it was surpassed by China’s. Today, the US remains the world’s largest economy, followed by China.
