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Japanese Economy to Drop to 4th, Behind Germany for First Time in 55 years

Japanese Economy to Drop to 4th, Behind Germany for First Time in 55 years

The International Monetary Fund has forecast that Japan will drop to the fourth-largest economy this year after being overtaken by Germany for the first time in 55 years.

According to the IMF forecast, Japan’s nominal GDP will go down 0.2% from the previous year to $4.23 trillion, while Germany‘s nominal GDP is expected to go up 8.4% to $4.43 trillion.

A big reason behind the fall is attributed to the weak yen and inflation, with the depreciation of the yen showing how much it has effectively reduced the scale of Japan’s economy.

“The cost of eating out has gone up by 30% to 40%,” said a German tourist who commented that Germany had also been impacted by rapid inflation. “In addition to allowances for inflation, there are wage increases every year.”

According to Minister of Economy, Trade and Industry Yasutoshi Nishimura, “Japan’s growth potential is declining.”

Japan passed Germany (West Germany at the time) in 1968 to become the world’s second-largest economy and held the spot for some decades, but was overtaken by China in 2010. After half a century since 1968, Japan is set to be passed by Germany.

Here’s a news report on the matter:

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