The International Monetary Fund had projected the country’s fall to the fourth rank.
After contracting in Q4 2023, Japan’s economy is now the fourth-largest in the world behind Germany.
Following two straight quarters of contraction, it slipped into recession.
Economists attributed a weaker Japanese yen, a population decline, lagging productivity and competitiveness, and stagnating wages as the reasons behind the drop in rank.
The economy shrank at an annual rate of 0.4 per cent in Q4 2023, though it grew by 1.9 per cent for the entire year, according to cabinet office data on real gross domestic product (GDP) released today. The contraction was 2.9 per cent in Q3.
Japan’s nominal GDP was $4.2 trillion last year.
The Japanese economy was the second largest till 2010, when it was overtaken by China’s.
Economists attributed a weaker Japanese yen, a decline in its population, lagging productivity and competitiveness, and stagnating wages that have left households reluctant to spend as the reasons behind the drop in rank, according to global newswires.
The German economy also contracted in Q4 2023 by 0.3 per cent.
The United Kingdom also announced that its economy has entered a technical recession in Q4 2023, shrinking by 0.3 per cent from the previous quarter. The quarterly decline followed a 0.1 per cent fall in the previous quarter.
Fibre2Fashion News Desk (DS)
