China News Service, Beijing, February 15 (Reporter Li Xiaoyu) The third place in the global economy has changed hands. The latest data shows that Japan's nominal gross domestic product (GDP) in 2023 is approximately US$4,210.6 billion, lower than Germany's US$4,456.1 billion, falling from third in the world to fourth. It was overtaken by Germany after more than 50 years.
This scene is somewhat dramatic. Some analysts believe that the main reason for the change in the economic status of Japan and Germany is not the improvement of Germany's strength, but the exchange rate.
The German economy will shrink by 0.3% year-on-year in 2023, which is far worse than the average level of developed economies and even less than the estimated growth rate of the global economy of about 3%. The International Monetary Fund (IMF) bluntly stated that Germany has become the worst-performing major economy in the world last year.
At present, the exchange rate of the Japanese yen against the US dollar has fallen to around 150. Japan's Mitsubishi UFJ Research Institute analyzed that in addition to the depreciation of the yen, rising prices and the appreciation of the euro against the US dollar also pushed up Germany's GDP. If the price factors in the euro exchange rate and the nominal GDP of Japan and Germany are constant, and the exchange rate of the US dollar and the Japanese yen returns to before the sharp depreciation of the Japanese yen, the GDP of Japan and Germany should be at the same level.
Although there are accidental factors in being overtaken by Germany, it is an indisputable fact that Japan's economy has encountered severe challenges.
Zhang Jifeng, a researcher at the Institute of Japan Studies at the Chinese Academy of Social Sciences, wrote that Japan's economic malaise and difficulty in recovery did not begin with the impact of the epidemic, but were a continuation of the long-term chronic recession after the collapse of the bubble economy. In addition to factors such as the aging of the population, the law of declining economic growth, and the increasingly complex and severe international situation, the government's economic policy errors are also one of the reasons for the continued sluggishness of Japan's economy in recent years.
Zhang Jifeng said that Japan has implemented a policy of depreciating the yen in the hope of expanding exports, thereby driving the expansion of domestic production and increasing employment and residents' income. However, since the implementation of this policy, residents' real wages have fallen instead of rising, making it impossible to expand consumption, leading to continued deflation and economic development falling into a vicious cycle. In the medium to long term, Japan's economy may not be able to escape the fate of long-term sluggishness and chronic recession.
It is worth noting that as a century of changes accelerates, the change in the economic status of Japan and Germany may be just the beginning. Taking into account the different economic resilience of various countries, when the world economic situation turns from warm to cold, the "ranking list" of major economies may continue to be shuffled in the future.
According to the IMF, India will become the world's fourth largest economy in 2026, and Japan's GDP will decline again by then, falling to the world's fifth largest economy. (over)