L'Japanese economyafter contracting in the final quarter of 2023, has positioned itself as the fourth largest economy in the world, falling behind Germany. The data reported a ddecrease of 0.4% of GDP real on an annual basis from October to December, although it grew 1.9% in the whole of 2023. That contraction follows a 2.9% decline in the July-September quarter. Two consecutive quarters of decline are commonly considered a sign of a technical recession.
Japan, a recession announced?
Until 2010, Japan's economy ranked as the second largest in the world, before being overtaken by China. In 2023, Japan's nominal GDP reached $4.2 trillion, while Germany's stood between $4.4 and $4.5 trillion, depending on currency conversion. The drop to fourth place was attributed in part to weakness of the Japanese yen. In this sense, economists suggest that this weakness also reflects the demographic decline and decreasing productivity and Japan's competitiveness.
Japan, once celebrated as an “economic miracle,” has instead faced innumerable hardships for much of the past 30 years, following the collapse of its financial bubble in the 1990s. There Germanyon the other hand, has dominated the global markets with its high-end products, but it too contracted 0.3% in the most recent quarter.
Also there Great Britain it contracted in the final quarter of 2023, entering a technical recession. These data reflect the challenges faced by developed economies, as the gap between them and emerging economies narrows.
The United States they remain the world's largest economy, followed by China and India, the latter growing rapidly. Related to this is that Japan may soon be surpassed by India itself in terms of nominal GDP.
The country of the Rising Sun is considering immigration as a solution to labor shortages, but its restrictive approach to bringing in new people has drawn criticism. Robotics is an alternative, but it cannot completely compensate for the lack of workers.
THE stagnant wages finally they reduced private consumption, while companies preferred to invest abroad rather than in the domestic market. With the household savings rate moving negative, economic growth is expected to slow further next year. Private consumption, which makes up more than half of economic activity, fell 0.2%, compared to market forecasts for a 0.1% gain, as rising living costs and climate change discouraged families from dining out and buying winter clothes.
The Minister of Economy Yoshitaka Shindo he stressed the need to aim for solid wage growth to support consumption, which he described as “lacking momentum” due to rising prices.
Where Italy is located among the world powers: the ranking
Italy at the moment is theeighth world power in terms of nominal GDP, but boasts third place for gold reserves, excluding those of the International Monetary Fund. Right now in front of us, at the top of the ranking we find the United States, followed by China, Germany, Japan, the United Kingdom and France.
