The beginning of the end of Japan (the land of the sinking sun)?

Editor's note: With an out of proportion aging population, huge public debt (US$9.2 trillion and good at managing debt but for how long?), lowest birth rate recorded (young Japanese adults are avoiding marriage, sex and having children), increasing tax burden on its citizens, serious labor shortages, massive bureaucracies and mostly self-serving crony politicians (besides being the highest paid politicians in the world) it doesn't appear Japan is presently in a very healthy state, socially (suicides started increasing again) or economically. It seems the only thing Japan is known for these days by the thousands of tourists arriving almost daily are Japan's safe streets and famous food. Nobody wants a weak yen except foreign tourists. Then there is the night life in Tokyo (only if you're Japanese though). Japan is slipping, slipping, or the last days of Japan before Japan "goes dark"?

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Source: The Asahi Shinbun

Japan's GDP falls behind Germany to fourth place amid weak yen

February 16, 2024

For the first time in 55 years, Germany overtook Japan in gross domestic product (GDP) in 2023, thanks in part to the weak yen.

Japan is now the world's fourth-largest economy.

The Cabinet Office announced on Feb. 15 that Japan's nominal GDP, including the effects of commodity prices, increased 5.7 percent from the previous year to 591.4 trillion yen, but when converted to U.S. dollars, it decreased by 1.1 percent to $4.2 trillion.

This falls behind Germany, which has a nominal GDP of $4.4 trillion.

Japan’s nominal GDP reached a record high due to growth in consumption and exports following its recovery from the COVID-19 pandemic.

The real GDP, excluding the effects of commodity prices, also rose by 1.9 percent.

Both figures marked three consecutive years of positive growth.

Germany overtaking Japan in nominal GDP is largely attributed to the yen's depreciation.

The average exchange rate in 2023 was 140.5 yen to the dollar, around 9 yen weaker than the previous year’s average.

Germany's nominal GDP also expanded by 6.3 percent in 2023, driven by commodity prices that surged more rapidly than in Japan.

However, of more serious concern is the Japanese economy’s long-term stagnation.

Despite Germany having only two-thirds of Japan's population, data from the International Monetary Fund (IMF) shows the real growth rate from 2000 to 2022 averaged 1.2 percent in Germany while it was only 0.7 percent in Japan. "The difference in growth rates has accumulated over time, with the yen's depreciation delivering the final blow," said Shinichiro Kobayashi of Mitsubishi UFJ Research and Consulting Co.

Japan's share of the world’s nominal GDP has declined from its peak of 17.8 percent in 1995 to 4.2 percent in 2022, according to the Cabinet Office.

Please go to The Asahi Shinbun to continue reading.

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