On October 24th, Bloomberg reported that according to estimates from the International Monetary Fund (IMF), Germany's gross domestic product (GDP) this year will reach $4.43 trillion, while Japan's is $4.23 trillion. Therefore, Germany is expected to surpass Japan and become the world's third largest economy by 2023. In response to this, Japanese Minister of Economy and Industry, Yasuo Nishimura (r ě n) Japan's economic growth is sluggish and currently in a sluggish state, but Japan is planning to regain the economic status it has lost in the past 30 years.
Japanese media have commented that the sharp decline in the exchange rate of the Japanese yen against the US dollar is an important reason why Japan's GDP may be overtaken by Germany, and the level of price fluctuations in Germany and Japan will also have an impact on the ranking. It is undeniable that the depreciation of the yen and price fluctuations are both facts, but it may not be accurate to attribute Japan's GDP to this once again. The reason why the Japanese economy has had a "lost 30 years" and is still struggling to overcome the dilemma of low growth is due to the lack of vitality in the economy itself.
Unlike the two major territorial powers of China and the United States, Japan, which is small in territory, has very limited land and natural resources. For a country, this can be said to be a 'congenital deficiency'. In terms of population structure, Japan's continuous aging and fewer children trend over the years is difficult to reverse, resulting in insufficient labor force, consumption, and investment, which directly leads to the imbalance of Japan's industrial structure and lack of innovation, unable to provide sufficient support for economic growth.
Especially in terms of innovation, there is a significant gap between Japan and China and the United States. There are many "unicorn" companies in China and the United States that are used to measure a country's innovation capabilities, but few in Japan can take advantage of them. At the same time, traditional Japanese enterprises are facing pressure from their competitors, and the tide of the times makes them even more powerless to resist; On the other hand, in the face of emerging industries such as the digital economy and new energy, the performance of Japanese innovative enterprises is lackluster, and traditional enterprises are at a loss, making economic growth naturally a luxury.
Faced with a sluggish economy, the Japanese government is not sitting idly by, and adjusting monetary and fiscal policies is its main means. However, the economy lacks endogenous momentum, and any amount of policy stimulus is futile. The performance of the Japanese economy over the past 20 to 30 years is sufficient evidence of this. Therefore, it is not difficult for us to understand why, as soon as the International Monetary Fund predicts that Germany's GDP will catch up with Japan, the Japanese media has highlighted the depreciation of the yen and price fluctuations, which are directly linked to monetary and fiscal policies. It is difficult to say whether this is a fixed mindset or a helplessness in finding other effective ways, but it is certain that if Japan continues to follow the old path, there may only be more and more countries catching up with it economically.
In addition to the possibility of Germany overtaking the total GDP, Japan's per capita GDP has also shown a continuous downward trend. Previously, even compared to many developed economies in the West, Japan's per capita GDP was among the top. But now, Japan is almost at the bottom of the Group of Seven (G7). So many Japanese experts expressed concern that Japan is about to be kicked out of the ranks of developed countries.
The statement by Japanese Minister of Economy and Industry, Yasuo Nishimura, that Germany's GDP is about to catch up with Japan also reflects the Japanese government's helplessness and struggle against the sluggish economy. However, although he said that the Japanese government is preparing to stimulate the economy through a package plan, the Japanese people may no longer have patience. In recent polls, 58.6% of respondents stated that they do not expect the upcoming economic policies of the Kishida government as proof. And this is also another blow to the government of Toyoto Kishida, following the possibility of losing his third place.