Germany Overtakes Japan As The World’s Third-largest Economy
Germany overtook Japan as the world’s third-largest economy, following official data released on Thursday revealed a slower growth in Japan’s economy at 1.9 percent in 2023.
The decline in Japan’s economic status was primarily attributed to a significant fall in the value of the yen.
Japan was once forecast to become the world’s biggest economy.
According to government data, Japan’s nominal gross domestic product (GDP) in dollar terms for 2023 stood at $4.2 trillion. In comparison, Germany, with a GDP of $4.5 trillion, secured the third position globally, AFP reported.
This shift in rankings is notably due to the yen’s depreciation, which slumped over 18 percent against the dollar in 2022 and 2023, including a seven percent drop last year, it said.
The Bank of Japan’s decision to maintain negative interest rates also contributed to the currency’s decline.
Japan, facing a declining population and low birth rates, experienced a 0.1 percent contraction in its economy in the last quarter of 2023, missing market expectations.
Germany faces labour shortages
In contrast, Germany dealt with worker shortages, the European Central Bank’s policy changes, and labour scarcity.
With a burgeoning young population and higher growth rates, India is anticipated to surpass both Japan and Germany, claiming the third spot in the world’s largest economies, following the United States and China, later this decade.
