According to a report by Kyodo News Agency on October 23, the International Monetary Fund (IFM) predicts that Japan's GDP will be surpassed by Germany this year, dropping from third in the world to fourth in the world.
Japan's GDP has fallen to the fourth place in the world, which is not only an economic issue. As we all know, the size of the economy is usually linked to international influence. If Japan's GDP ranking declines, it means that Japan's international influence will decrease. If it continues to be surpassed by countries such as the UK or India in the future, Japan's international influence will further marginalize.
According to the Economic Expectations data of the International Monetary Fund, Japan's GDP in 2022 ranks third in the world with $4.233 trillion. Last year, the gap between Japan and Germany was $158 billion. In 2023, Germany's GDP is estimated to be $44298 trillion, while Japan's GDP is estimated to be $4.2308 trillion.
Japan was snatched "second in the world" by China in 2010, and according to the current situation, Japan will be snatched "third in the world" by Germany in 2023. Japan has been ahead of Germany for 45 years, and I don't know what kind of feeling it would feel like for Japan, which once overtook Germany, to be overtaken by Germany now.
Japan's GDP has been surpassed by Germany, mainly due to:
The yen has depreciated too much in recent years. In 2022, the average exchange rate between the yen and the US dollar was 131.5:1, while in recent times, the average exchange rate between the yen and the US dollar was 150:1. Although the euro is also declining, it is not as severe as the yen's decline, ultimately leading to a loss in the exchange rate of GDP in US dollars. Compared to 2022, this year's nominal GDP growth rate in Germany is about 8.4%, while Japan's nominal GDP growth rate is about -0.2%. In the process of ebb and flow, Japan naturally lost to Germany
On October 23rd, Nikkei Chinese reported that with the continuous rise of food prices, the "Engel coefficient" reflecting the proportion of food expenditure to consumer expenditure has reached 26%, setting the highest level in Japan in nearly 40 years.
Although Japanese Prime Minister Fumio Kishida has introduced various new policies to "compete for the economy", providing subsidies in areas such as food, gasoline, electricity, and gas costs, the role of subsidies is very limited compared to rising prices. In September, the approval rate of Yasuo Kishida in the poll was still 39.8%, while in October, it was only 32.3%, the lowest since he took office in October 2021.
Some international institutions predict that Japan will lose to countries such as India or Vietnam in terms of GDP in the future, which is the end of the story. Anyway, Japan's loss to Germany is already a foregone conclusion.