Japan's nominal GDP fell to the fourth place in the world, overtaken by Germany

Japan's nominal GDP fell from the third to the fourth in the world, and was overtaken by Germany, and the exchange rate was the most direct factor. Affected by the Russia-Ukraine conflict, Germany's economic growth is not optimistic. However, in recent times, the yen has been on the downward trend against the dollar, although there has been a brief recovery in the middle, and recently it has come to around 0.0067. Germany eventually surpassed Japan's nominal GDP.

The deep-seated factor that led to the decline in Japan's nominal GDP ranking is its long-term lack of endogenous growth momentum. According to data released by the Cabinet Office of Japan, in the fourth quarter of 2023, Japan's real GDP fell by 0.1% from the previous quarter after excluding price changes, and the converted adult rate decreased by 0.4%, showing negative growth for two consecutive quarters. Labor shortages caused by declining birthrates and aging populations are the root cause of Japan's continued economic downturn. While Japanese officials have tried to increase the birth rate and encourage more women and the elderly to participate in the labor force through a series of policies, they have had little success.

Perhaps Japan is not far from being overtaken by India and falling to fifth place in the world. After all, India has the largest and most dynamic young and middle-aged labor force in the world.

As Japan's close neighbor, China shares many similarities with Japan in terms of economic development and demographics. We should learn from Japan's current situation, reflect deeply, and not let Japan today become our future.