Germany overtakes Japan as the 3rd largest economy worldwide

Posted on February 16, 2024   |  

Japan fell to 4th place in the global economy, replaced by Germany due to Yen devaluation.

Japan's GDP for 2023 reached $4.2 trillion, growing by 1.9%, but its currency, the Yen, depreciated by 18% against the Dollar in 2022-2023, including a 7% drop last year.

The Bank of Japan's negative interest rates also contribute to Yen's depreciation.

Germany, with a GDP of $4.5 trillion, moves up to third globally.

Both Japan and Germany, as export-driven economies, face challenges, but Japan's aging population and low birth rates result in a unique struggle with labor shortage.

Japan's economy contracts by 0.1% in Q4 of 2023, missing market expectations, marking the second consecutive quarterly decline.

Germany faces labor scarcity, European Central Bank policy changes, and worker shortages as challenges.