Japanese officials attribute the drop in nominal GDP to the yen’s sharp depreciation against the US dollar last year.
Japan lost its status as the world’s third largest economy at the end of last year. This gave way to Germany and was tied for fourth place. This was reported by the Japanese agency Kyodo, citing data from the country’s government.
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Japan’s nominal gross domestic product (GDP), not adjusted for inflation, is $4.21 trillion, while Germany’s is $4.5 trillion.
Japanese officials blamed the decline in nominal GDP on the sharp fall in the value of the yen against the US dollar last year.
The country’s economy shrank 0.1% in the fourth quarter of last year from the previous quarter, or 0.4% year-on-year, as households and businesses cut spending, government data showed.
Private consumption accounts for more than half of Japan’s GDP. In October-December, it fell 0.2%, which was the third consecutive quarter of decline. Households are struggling with rising living costs and falling real incomes amid Japan’s 40-year high consumer inflation, which is set to reach 3.1% in 2023.
Government investment also fell 0.7% in October-December, the second quarter in a row.
The world’s largest economy remains the United States with a GDP of about $27 trillion in 2023, followed by China in second place, whose economy is about $18 trillion.
Source: korrespondent
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