“Japan’s economic downturn continues after the bubble economy… “Germany is the result of steady growth.”
The Asahi Shimbun reported on the 16th that it is almost certain that Japan will fall to fourth place in the world, overtaken by Germany, in terms of nominal gross domestic product (GDP) last year.
Nominal GDP is the total added value of goods and services created by a country. As a representative indicator used when comparing the size of the economy, last year’s first place was the United States (USD 26.95 trillion, approximately KRW 35,902 trillion), and second place was China (USD 17.7 trillion, approximately KRW 2,3579 trillion).
The 2023 nominal GDP announced by the German government on the 15th (local time) is 4.1211 trillion euros (about 5,991 trillion won), an increase of 6.3% compared to the previous year, which is about 4 trillion won when converted to dollars at the average exchange rate for the same year announced by the Bank of Japan. It’s $500 billion.
Japan’s nominal GDP for 2023 will be announced next month, but Mitsubishi UFJ Research & Consulting estimates it to be 591 trillion yen (about 5,385 trillion won), which, when converted to dollars, is about $4.2 trillion, which is less than Germany. In yen terms, it will increase by 5.7% compared to the previous year, but as the yen weakens, it is predicted to decrease by 1.2% in dollar terms.
One of the reasons for Germany’s significant increase in nominal GDP is that it suffered a sharp rise in prices, more severe than that of Japan, due to a surge in energy prices following Russia’s invasion of Ukraine. The real growth rate, excluding the impact of prices, decreased by 0.3%, the first negative growth in three years.
Asahi said, “Because the comparison is converted to U.S. dollars, the factor is that Japan’s GDP is decreasing due to the weakening yen, while Germany’s inflation is rising significantly,” adding, “However, it is also the result of Germany’s economic growth rate exceeding Japan’s in the long term.” “There is,” he pointed out. “This is the result of continued economic recession in Japan after the collapse of the bubble economy, while Germany continued to grow steadily.”
The newspaper also said, “In the long term, Germany’s growth rate is exceeding that of Japan, so the gap in economic size is narrowing,” and “According to data from the International Monetary Fund (IMF), the simple average of the real growth rate from 2000 to 2022 is 1.2% for Germany. In comparison, Japan remains at 0.7%,” he added.
Japan surpassed West Germany in gross national product (GNP) in 1968 to become the world’s second-largest economy, but fell behind China in GDP in 2010 to take third place.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.