Last year, Korea’s economic growth rate lagged behind Japan’s for the first time in 25 years since the 1998 foreign exchange crisis. However, Japan’s nominal gross domestic product (GDP), converted to dollars, fell from 3rd to 4th in the world. Moreover, the real growth rate has been negative for two consecutive quarters, and the Japanese economy has entered a recession for the first time in five years.
Japan’s nominal GDP for 2023, announced by the Cabinet Office on the 15th, is 591.482 trillion yen, or 4.2106 trillion dollars in dollar conversion. Germany’s nominal GDP last year was 4.1211 trillion euros, or $4.5 trillion in dollar conversion.
From 1968 to 2009, Japan was in second place after the first place, the United States, but in 2010, it was overtaken by China and fell to third place, and this time, it was overtaken by Germany and fell to fourth place. There are also predictions that it will be overtaken by India this year.
Due to the weakening yen and strengthening of the dollar, the total amount when converted to dollars decreased. On the other hand, Germany’s GDP was revised upward due to rising prices.
According to Nippon News Network, Shinichiro Kobayashi, a senior researcher at Mitsubishi UFJ Research & Consulting, pointed out that the change in rankings was not only due to the influence of the exchange rate, but also because Japan had focused only on cost reduction for a long time and did not engage in active management such as investment.
Based on real GDP excluding price fluctuations, it grew by 1.9% last year. It was 0.5 percentage points higher than Korea’s growth rate of 1.4%. This is the first time in 25 years that Korea has lagged Japan in growth rate since the 1998 foreign exchange crisis.
However, the growth rate in the fourth quarter was minus (-0.1%), compared to the third quarter (-0.8%). The Japanese economy suffered negative growth for two consecutive quarters, breaking expectations and suddenly falling into recession. This is because private consumption, which accounts for more than half of the Japanese economy, has decreased for three consecutive quarters.
Private consumption took a hit amid rising cost pressures and global headwinds, and Japan’s economy fell into recession for the first time in five years. Personal consumption, which accounts for the highest proportion of total consumption, did not increase at all.
Capital spending, another key private sector growth engine, was expected to rise 0.3%, but when opened it fell 0.1%.
Shinke Yoshiki, chief economist at Daiichi Life Research Institute, told Reuters, “What is especially noticeable is the slump in consumption and capital expenditures, which are key pillars of domestic demand,” and predicted, “The economy will continue to lack momentum for the time being without a major growth engine.” did.
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.
