Japan enters recession, loses 3rd-largest economy spot

Posted on February 26, 2024   |  

Japan's economy slips to the world's 4th-largest position after contracting in the last quarter of 2023, falling behind Germany.

The economy shrank by 0.4% annually from October to December, marking a technical recession after a 2.9% contraction in July-September.

Previously ranked second until 2010, Japan's nominal GDP totaled $4.2 trillion last year, slightly lower than Germany's $4.4 trillion.

Currency conversion contributed to Japan's decline, with nominal GDP comparisons typically in dollar terms.

Japan's weakened position also reflects challenges such as population decline, lagging productivity, and competitiveness issues.

Gross domestic product (GDP) measures a nation's product and service value, with the annual rate projecting the quarterly rate over a year.

The US retains its position as the largest global economy, with a GDP of $27.94 trillion in 2023, followed by China with $17.5 trillion. India's GDP is approximately $3.7 trillion, growing at around 7%.