2024-02-15 13:38:42
Germany has taken third place from Japan in the ranking of national economies. But that’s not a reason to celebrate.
According to recent data from Tokyo, Germany has replaced Japan as the world’s third largest economy. Despite Japan’s gross domestic product (GDP) growing by 1.9 percent last year, Germany was able to overtake the Asian country. Previously, the International Monetary Fund (IMF) estimated that Japan’s economic performance would deteriorate in 2023.
The economic data published by the Japanese government on Thursday show: Japan’s gross domestic product (GDP) was 4.2 trillion dollars (around 3.9 trillion euros) in 2023, while Germany’s GDP was the equivalent of 4.5 trillion dollars (around 4, 12 trillion euros), as reported by the Reuters news agency. The IMF even sees Germany at $4.7 trillion. According to a report by the US magazine “Forbes”, the USA is in first place with around 27.97 trillion dollars, followed by China with an estimated 18.566 billion dollars.
Japan’s GDP shrank by 0.1 percent in the fourth quarter of last year. The ongoing decline of the local currency, the yen, continues to weigh on the Asian economic power. Japanese households are struggling with rising living costs and falling real wages. Corporate investment spending was also weak, falling by 0.1 percent. “The fact that Germany has overtaken Japan shows that we absolutely need to push forward with structural reforms and create a new phase of growth,” said Economic Revitalization Minister Yoshitaka Shindo in Tokyo.
Embed
Germany’s economy in crisis
The place on the podium is more symbolic for Germany. The German economy is also struggling with economic problems and was only able to achieve low growth last year. Germany’s GDP even shrank by 0.3 percent.
Federal Finance Minister Christian Lindner even warned on Wednesday about the consequences of a stagnating economy in Germany. With a view to the growth of just 0.2 percent forecast for the German economy in 2024, the FDP leader said in Potsdam: “I find this downright embarrassing and dangerous from a social perspective.”
Habeck will present the annual economic report next week. In the fall, the traffic light coalition had assumed 1.3 percent. But then the economy slipped into recession. In addition, there was the budget ruling of the Federal Constitutional Court, according to which the federal government had illegally moved Corona funds to a climate fund. In addition, according to Habeck, people have less money to invest because the government had to let the energy price brakes expire at the end of 2023 due to austerity constraints.
The European Commission wants to present its current economic forecast this Thursday. In its autumn estimate, the authority assumed that the EU economy would grow more slowly this year than initially expected.