Japan is no longer the world's third largest economic power

As Japan grew in the 1960s, it has long established itself as the world's number two economic leader behind the United States. A second place that the Land of the Levant Sun left in 2010 for the benefit of China. This year, Tokyo is expected to return to the fourth largest economy in the world, surpassed by a European country: Germany.

The main reason for this loss of speed is demographic. Every year, the country loses more than 800,000 inhabitants and births are declining. The ageing workforce is no longer able to produce more and businesses are less competitive. Many export less, including in the automotive industry. Jobs are created in the services sector but little in the financial and manufacturing sector, strong in value added, which directly affects growth.

Moreover, the yen is in free fall against the dollar (-30% since 2021!). According to the IMF (International Monetary Fund), Japan's GDP (Gross Domestic Product) is expected to show at $4230 billion this year, which is well below Germany's expected GDP of $4430 billion, a country that is less populated (83 million inhabitants in Germany versus 125 million in Japan). IMF projections also suggest that Indian GDP, which increases by 6% each year, could exceed Japanese GDP by 2026 or even German GDP by 2030. However, a ranking according to GNP (National Gross Product), which shows foreign investment, would be more advantageous for Tokyo. Indeed, Japan has invested heavily internationally without necessarily receiving in return, unlike Germany, which has invested but also benefited from many foreign investments.

While the Japanese minimum hourly wage has been low for many months (currently at 1004 yen or 6.10 euros), the government has just launched a new stimulus plan to help households cope with inflation. On the programme: tax cuts and subsidies to pay energy bills. Measures that may prove insufficient to revive the country's economy.

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• Diagnosis of international logistics flows

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Source(s): The Echoes | The Echoes

Editor(s): C.BEDOUIN