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Japan, now world's No. 4 economy, on steep road to reverse low growth

By Noriyuki Suzuki

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Rankings based on Purchasing Power Parity

China 35 trillion International dollars

USA $28 trillion

India $14 trillion

Japan $6.7 trillion

Germany $5.7 trillion

All data from IMF, page for China for example https://www.imf.org/external/datamapper/profile/CHN

7 ( +18 / -11 )

Purchasing power parity is a worthless metric

-7 ( +11 / -18 )

Tell the IMF

0 ( +9 / -9 )

When measured by nominal GDP per capita, South Korea and Taiwan are expected to eclipse Japan in 2031 and 2033, respectively, according to forecasts by the Japan Center for Economic Research.

By several important metrics, like real per capita GDP, these nations will surpass Japan even earlier.



"There are various ways to boost metabolism. For instance, it can be done by removing a certain safety net or by raising interest rates. Labor shortages can become a trigger, too," Uchida told a press conference in early February.

Uchida, a key figure behind the central bank's unorthodox policy, reassured markets that monetary conditions will likely remain accommodative.

The voodoo trickle down economics including the QE subsidy to the wealthy promoted by the LDP and BOJ have been the downfall of Japanese living standards.

-5 ( +13 / -18 )

By several important metrics, like real per capita GDP, these nations will surpass Japan even earlier.

And Japan will decrease even more, many issues are not being addressed properly and J Govt just busy spending more money to unrelated things that can fix this.

-10 ( +13 / -23 )

Japan's population is declining, so it doesn't need to generate higher growth, as GDP is an aggregate of the economy's output. It doesn't tell us much about economic health, just size.

The focus should be on higher wages, given that private consumption, not production, drives most of the economy. If Japan really had a labor shortage, then real wages would be rising, which they are not. Simple supply and demand. So the demographic argument is a false one, and it's really about employers wanting to suppress wages.

24 ( +30 / -6 )

With a persistently weak yen blamed for making the size of the economy look smaller in U.S. dollars

bwahaha! Trying to blame the weak yen is clutching at straws. The reason is, there has been no economic growth in Japan for thirty years. Salaries have been stalled and reducing for decades. Japan is still trying to hold onto manufacturing markets that no longer belong to Japan. The Japanese economy thrived in the 70’s and 80’s because it had no real competition. Now, it has a lot of competition for international markets and it is failing due to not being able to adapt. This trend will continue and the worst is yet to come.

-6 ( +15 / -21 )

Japan is No.4 now. This is still a big surprise.

1 ( +4 / -3 )

it's really about employers wanting to suppress wages.

Yes, JeffLee, true, which they can do in concert through their associations (quasi-cartels) while denying organised labour.

7 ( +13 / -6 )

Japan, now world's No. 4 economy, on steep road to reverse low growth

Correction: Japan, now world’s No. 4 economy, accelerating on slippery slope to total collapse due to decades of mismanagement by complacent, corrupt and incompetent LPD monolith which can’t understand that it’s no longer 1986.

-7 ( +5 / -12 )

Japan was so proud of its number two ranking and then when China took that spot it couldn't be helped because of China's sheer size, but now along comes Germany with a much smaller population and the government says the dollar/yen rate is to blame.........not themselves of course.

In 2 years time when India passes it they Weill again attribute it to the number of people in that country.

They never seem to mention the GDP per capita though where Japan ranks a lowly 34 according to the IMF.

The stock market might be at almost artificially inflated high but at the same time recycle and discount stores haven't been fuller.

The last time the stock index was this high the high end shops and department stores in Tokyo were awash with customers......fast forward to now and only the ¥100 and secondhand shops are thriving.

The 'middle class' has been decimated.

-9 ( +13 / -22 )

What we need is a super-duper Olympics!

that will cure everything

and make sure the parliamentarians run the construction effort

-4 ( +14 / -18 )

In a recent public appearance, BOJ deputy chief Shinichi Uchida touched on the need to improve the "metabolism" of the economy.

And this comment’s regurgitation by the press of a job-for-life yes man is what exactly?

Where are the comments from the entrepreneurs and the scheme is designed to give young Japanese the ability to take risks and grow the economy and their own futures?

4 ( +5 / -1 )

This will be boring to some, but I find it fascinating......

Japan's GDP, $4.2 trillion

California's GDP, $4 trillion

Japan's population more than three times California's, 124 million vs about 40 million.

Germany, GDP about $4.5 trillion, has more than twice the population of

California, 85 million vs. 40 million.

Still, quality of life in both Japan and Germany is pretty good.

9 ( +9 / -0 )

Based on PPP, Russia is now larger than Germany. They have managed this while under Western sanctions. The same sanctions have forced energy prices up in Germany reducing its GDP in PPP terms. This strikes me as what you call an "own goal".

As for Japan, the working age population is falling by something like 1.5% a year (one million out of 65-70 million). That is not a recipe for knock it out the park GDP numbers. Japan's goal should be to age gracefully. World domination is completely out of the question.

1 ( +8 / -7 )

The top countries US, China and India have major poverty issues. Being at the top is meaningless for the health of the country and quality of life.

I’ve lived in the US, China and Japan, and Japan by far has a better quality of life for a much larger majority of its population.

14 ( +17 / -3 )

Simple fix, increase immigration

-9 ( +4 / -13 )

OK then.

60% of foreigners who moan/deride Japan (whilst living there!) should move to China & India since they are already "richer" and much better. Much cleaner too, especially India.

The remaining 40% of foreigners who moan/deride Japan (living there too!) should move to South Korea & Taiwan, given they're already much better and soon will be "much richer".



-11 ( +4 / -15 )

Japan, now world's No. 4 economy, on steep road to reverse

Headline fixed. You're welcome.

-8 ( +3 / -11 )

I guess it's a shame that Japan lost the number 3 spot (at least on exchange rate), but the country still has a high standard of living, a great society, and a great culture, so I'm still very glad to live here.

In terms of the other countries mentioned, the US has very high inequality and awful social welfare (e.g. healthcare), and China is a horrific, totalitarian dystopia with too many structural problems to list here. I don't know too much about Germany, but was kind of surprised to see them up there as they appear to have many problems:


India too has many problems, though I hope that they will be solved as it becomes more prosperous... but this will depend on whether Modi prioritizes the people over Hindutva, which looks unlikely.

South Korea has the world's lowest birthrate, so its economy will undoubtedly slow, and much of its success is tied to the chaebol: if they do badly (and Samsung announced its lowest profit in 15 years for the last quarter), the economy is disproportionately affected. And Taiwan has issues with low wages (like Japan) and employment:


In short, regardless of its GDP, I think Japan is still doing pretty well on the whole and is a great place to live.

4 ( +10 / -6 )

Demographic cliff slamming Japan first. The others will follow.

0 ( +2 / -2 )

Not much meaning as mainly due to recent weak JPY.

With a USD JPY at 141 (now 151) Japan economy would be larger than the German one again! This type of move can easily happen within a single day!

Only if the ranking is confirmed over a longer term period can conclusion be made.

6 ( +7 / -1 )

Not much meaning as mainly due to recent weak JPY.

And why is the yen weak?

Because of the economy.

No getting out of it.

-3 ( +3 / -6 )

SpitfireToday  12:47 pm JST

Not much meaning as mainly due to recent weak JPY.

And why is the yen weak?

Because of the economy. 

Largely because of policy mistake of the BOJ to keep zero rates forever.

They believed it would be good for the economy. In fact it was probably the contrary (zombi companies…etc).

3 ( +3 / -0 )

Japan, now world's No. 4 economy, on steep road to reverse low growth

Wait up!

Japan is in a recession.

A constituent of a recession is a contraction of the GDP.

Less goods and services being produced in a country In a year.

That is a minus number.

The people in Japan don’t need to be told what the article omits;they already know it.

-1 ( +2 / -3 )

i just hope that Japan will further slip to no.5 or no.6 and china rise to no.1. after this can chinese commies stop migrating to Japan? china is such a paradise and can you people just live happily ever after in your own country and stop coming out to disturb others people daily normal live? and for those grumbling about poor Kishida gov, poor economy, poor Fukushima nuclear plant, can you consider move to China or India? they are economy super power and will rise to no.1 and no.2 very soon. Please let us to work and struggle in Japan alone, and suffering in this world no.4 economy country

-7 ( +5 / -12 )

The Japanese government is the worse when it comes to change and keeping pace with the rest of the world. Sometimes it is good, however, they need now to wake up and smell the coffee and I pray sooner than later and raise interest rates. When I say raise not at the rate of N. America, however, maybe 2 or 3 percent, and so, this shores up the yen, brings down the cost of imports and not hurt the economy.

-1 ( +3 / -4 )

First, purchasing power parity at country level is meaningless since by definition is comparing what can be bought locally with local currency...

GDP per capita is the closest best ratio to represent wealth for a country at individual level, leveled with Vini coefficient.

Yen weakness will progress on average in the long term, just see the global trend over decades. The golden age is finished when (real) working population was highest and new technologies was produced locally.

-1 ( +2 / -3 )


bwahaha! Trying to blame the weak yen is clutching at straws.

Blaming the weak yen for the poor economy over the past years is clutching at straws but when the GDP figures are calculated in US dollars and the yen is in the toilet, the figure is skewed. When overseas interest rates go down, the yen will rise. At 145yen to the dollar, Japan moves back above Germany.

-1 ( +3 / -4 )

The decline is not reversible until the politicians allow entrepreneurs to establish themselves which is not the situation at present.

GDP is down but rising prices are up!

Do some grocery shopping (in Japan) and see how dire living costs have become!

Prices seem to have doubled within the short space of several years.

I see what the majority of Japanese are buying and the cheaper groceries are prevalent…

-1 ( +2 / -3 )

MarkToday 03:27 pm JST

you seem to be wearing sunglasses tinted slightly rosey there Isabella if you think Japan is short on problems compared to the other nations you listed.

I never said Japan was "short on problems" at all. Of course it has problems.

I thought my reasoning was pretty clear, though perhaps not judging by your screed.

-2 ( +2 / -4 )

So Germany moved up a notch? Partly because they’ve went back to coal. Funny that!

-2 ( +2 / -4 )

Good point on PPP. Tucker Carson goes to Moscow and buys a week of groceries for his team. It was only $104.

On Germany, its direct investment in China increased by 4.3 percent to a record high of 11.9 billion euros (12.7 billion U.S. dollars) last year. The numbers were reported three days ago.

-3 ( +0 / -3 )

"For the (Japanese) economy to grow, the two employment groups that have been growing the quickest -- women and older employees -- need to gain higher incomes. This becomes possible with higher productivity,"

Yeah... so, get the old people and women to work more first, be more productive, and THEN increase wages? haha. As usual, Japan has it backwards, and as usual, they are reaping what they have sown. They have had SO long to work on the aging population problem (and promote growth and productivity in doing so), but now all they can do is vow to take action and hope things will change -- with no concrete plans -- and watch as Japan slips to 5th very soon, then likely 10th before the decade is through, with Japan also being 3rd-world by then. What's more, why would young people stay? Brain drain will exacerbate the problem as well. And since Japan won't touch immigration...

-4 ( +3 / -7 )

800lb gorilla in room for Japan's deflation due to aging and depopulation. Number of empty homes & projected growth simply staggering, NRI says +30% will be empty by 2033 with no end sight. Land prices falling, hence everyone wants mansion, banks at serious risk etc.

How do 'revive' an economy with growing debt servicing on record debt levels and growing health care costs due to aging? Number of kids collapsing, 2023 vs. 1973, about 70% fewer. Meanwhile defense expenditures now skyrocketing, not exactly a productivity driver.

Only answers, massive immigration and automation, as hard for aging populations to get more productive, especially as they consume LESS.

-4 ( +3 / -7 )

If you back out Japan's Govt. debt servicing (repayment and interest), back out deficit spending (not sustainable), and adjust year end GDP calc. of 140/yen to today's 150/yen, actual Japanese GDP today approx. $3.5T, making it lowest in G-7 on per capita basis by some bit.

Also consider ending 2022, IMF stated Russia's GPD per capita was $35.3k, currency has since strengthened, almost no Govt./Sovreign Debt due to deficit spending, Russian GDP today approx. $5.5T, making it #3, and their economic growth higher than Japan & Germany etc. But won't hear much on Russia economics in western media!

-4 ( +2 / -6 )

And what can you still do with that money even if you would get a little bit higher wages? Taking a taxi instead the bus when both sectors lack of drivers? Order the long waited for item in the internet, that probably also not isn't Japanese anymore, but takes weeks for delivery from China and also lacking the drivers for the last mile to your door? Or going again to your once favorite restaurant, but which is now long gone due to corona or being in the reds shortly before closing forever? Those are all no real solutions. The only thing helping is understanding of the fact that capitalism means growth and not so much more than again growth. That's why the population decline must be stopped and younger people are given money in the hands, for considering marriage and children. The tree that obviously massively loses its leaves and power needs a new root, that's it. And the measure is helicopter money for everyone plus even more helicopter money for the ones that now or in very near future contribute to population growth. This brings the ignition for new growth, more children, more potential innovation and more people who then produce and globally distribute those goods and services, which brings also in the money then from which the helicopter money can be paid back easily. If no one does that strategy, the turnaround point will soon be missed and the further accelerated decline is irreversible.

-6 ( +0 / -6 )

Abenomics was a terrible thing to cause the decline of Japan's economic status. Printing huge sums of Yen has achieved nothing besides some false hopes for the people during his nine years of rule. Now look at what is real, the price to pay for Abe's misleading policy.

The devaluation of Yen caused the fall of rank when GDP is measured by US dollars. Germany is also in recession and that country has a much smaller population than Japan, so how come the situation came worst like this ?

Japan should seek a closer relationship with China as that powerful neighbour is the only hope to raise her out of woes and unhealthy political practices. Japan was a golden state in 1980s, it was gone and she must wake up from that dream. A good political relationship with "Peoples Republic of China" is essential to save Japan out of sinking. Hopefully it is not too late!

-5 ( +1 / -6 )

India is on course to overtake Japan in 2026 and then become the world's third-largest economy in 2027, according to the International Monetary Fund.

This is an over optimised prediction of India. India is the world no.1 population country DOES NOT means India will climbing up to that no.3 status. India is not and definitely not being another China.

Instead that country is heading a big chaos in coming years. The internal conflicts of India especially the tensions between Hindus and Indian Muslims are running high. The discriminating policy of Muslim by Indian right wing Modi regime and his nationalism practicing will backfire and brought their country in very big chaos. India is definitely not a counter weight of China but a time bomb to explode!

-1 ( +4 / -5 )

elephant200Today 01:09 am JST

This is an over optimised prediction of India. India is the world no.1 population country DOES NOT means India will climbing up to that no.3 status. India is not and definitely not being another China.

You're right: India has a better outlook than China because it won't be paying for the corruption of the communist party in the future.

1 ( +5 / -4 )

Japan is a shadow of what it once was. Social, economic, and structural degeneration. I do not think that it is reversible.

0 ( +1 / -1 )

Compensation in Japan (especially for women) is laughable and has been for a long time.

When we moved from Japan to the US 15 years ago, my wife took the same exact job (dental assistant) she had in Japan. Her pay here in the US was literally 3.5 times higher. Instantly.

Another shocker I heard recently: An academic friend was at a conference in San Diego. The Japanese attendees were given a per diem stipend of $130 from their university. That's it. That was supposed to pay for a hotel room, dinner, and Uber or whatever. In California. Yeah how's that workin' out for ya

0 ( +2 / -2 )

So the stock market is on a tear but the country is in recession. It just goes to show that Japan Inc has nothing to do with Japan. They produce their things elsewhere, sell their things elsewhere and make money elsewhere. Really the smart move for Japanese today is to go elsewhere.

0 ( +0 / -0 )

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