Japan ceded its position as the world’s third-largest economy to Germany after its gross domestic product contracted for the time being directly in the fourth quarter of 2023, government data showed on Thursday, pushing the Asian country into a recession.
Preliminary data released through Japan’s Cabinet Office showed Japan’s GDP fell at an annualized rate of 0. 4% in the October-December quarter, the second consecutive quarter of decline after a 3. 3% annualized decline over the past three months.
According to Bloomberg, the fourth quarter’s numbers were well below economists’ forecasts of around 1.1% growth.
Private consumption, which accounts for more than a share of Japan’s economic activity, contracted 0. 2 in the fourth quarter as households reduced discretionary spending due to the skyrocketing cost of living.
With a nominal GDP of $4. 2 trillion in 2023, Japan’s economy is now smaller (in U. S. dollar terms) than Germany’s $4. 4 trillion economy, despite a 0. 3% contraction of the latter’s economy last year.
150. 18. Il is the conversion price of one US dollar to Japanese yen. This is the weakest point the Japanese currency has reached since it surpassed the 150 mark in November last year.
Technically, two consecutive quarters of falling GDP mean Japan is in recession. However, some economists told the Japan Times that this move would possibly not be appropriate due to the country’s “bad” GDP data, which “is often subject to significant revisions. “
India is expected to overtake Germany and Japan as the world’s third-largest economy this decade, according to analysts at the bank, adding that the U. S.
Japan’s GDP unexpectedly declines and loses its position as the third largest economy (Nikkei Asia)
Japan loses spot as No. 3 economy after surprise GDP contraction (Japan Times)