Germany surpasses Japan to become the world's third largest economy

The yen depreciates more than 18% against the USD in 2022 and 2023, including about 7% in 2023 alone as the Bank of Japan maintains negative interest rates, bucking the general trend of other central banks raising interest rates.

Unloading goods at Cuxport port, Germany. Photo: Cuxport.de

Germany has surpassed Japan to become the world's third largest economy , after the US and China. Japanese government data released on February 15 showed that Japan's nominal gross domestic product (GDP) in 2023 in USD was 4.2 trillion USD, while Germany's figure was 4.5 trillion USD.

Both economies are heavily dependent on exports and face major problems, but Japan's is more difficult than Germany's due to a severe labor shortage as its population declines and birth rate are very low.

India, with its growing young population and higher growth rate, is expected to overtake both Germany and Japan to become the world's third-largest economy by the end of this decade.

According to preliminary data released by the Cabinet Office of Japan, although the Japanese economy grew 1.9% in 2023, it contracted 0.1% in the fourth quarter of 2023. This is the second consecutive quarter of output decline after a 0.8% decline in the third quarter of 2023. The yen is expected to fall more than 18% in 2022 and 2023 against the USD, losing about 7% in 2023 alone as the Bank of Japan has maintained negative interest rates, going against the general trend of other central banks continuously raising interest rates.

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