The United States has declared itself a soft landing, and Germany has forced a recession by modifying its data, but two developed Western countries have finally had to admit that they are officially in recession.
The most frustrating of these is undoubtedly Japan, which has met the criteria for a technical recession for two consecutive quarters of GDP**, and has also been robbed of its place by Germany as the world's third economy, and now it can only be relegated to fourth place, and maybe India will squeeze it into fifth place in a few years.
Japan's official data shows that GDP grew by 19%, but when converted into dollars, it fell to 421 trillion, officially by Germany's 445 trillion exceeded.
Why is GDP growing positively, and we are still saying that Japan is in recession?
The reason for this is that Western economists' definition is not measured by annual GDP, but by the quarter-on-quarter growth rate of GDP.
According to the latest official data from Japan, Japan's GDP in the fourth quarter of 2023 will be negative 0 per year4% for two consecutive quarters**. So the Japanese economy has officially entered a recession, and along with Japan, the United Kingdom has also entered a recession.
Germany is also almost in recession at the same time, so why can it overtake Japan to become the third largest in terms of GDP?
This is because when we compare the two countries, we are not using the GDP growth rate, but the nominal value of GDP. Nominal GDP is more susceptible to market volatility than real GDP.
Germany's GDP growth rate in 2023 is negative by 03%, but the nominal growth rate has to be combined with the increase in prices, and the inflation rate in Germany is much higher than in Japan, so this is a lot of advantage.
In addition, the sharp depreciation of the yen exchange rate has led to a serious contraction of GDP in US dollar terms.
The US dollar continued to raise interest rates, and countries followed suit, but Japan did not move, resulting in the yen constantly **, and now it has fallen below 150 again. The Bank of Japan's move, of course, is aimed at stimulating domestic inflation, but in fact, it has the effect of taking over for the United States.
Because of this, Japan had to cede third place.
Is Japan's negative growth short-term or long-term?
Strictly speaking, Japan's negative growth is long-term. Japan's GDP increased from 501 trillion dollars,** 4. by 202223 trillion dollars, falling to 4 percent last year$21 trillion, for two years in a row**.
Earlier, Japan's GDP reached 555 trillion, much higher than now, but by 1998 it had also fallen to 4$1 trillion.
In the wake of the subprime mortgage crisis, Japan's GDP also reached 6.2 in 2012The all-time high of 27 trillion was subsequently reduced to 4 in 201544 trillion.
Therefore, Japan's GDP has gone up and down over the years, and it seems to have become the norm.
If Japan's GDP in the past two years is attributed to the depreciation of the yen, then why has Japan continued to ** US bonds in the past three months?
Since October last year, Japan has backhanded the US debt, but it turned out that this was not a whim, and in the following November and December, Japan continued to ** the US debt. The three-month cumulative** amount was $51.8 billion.
After a series of US Treasuries in the fourth quarter of last year, the exchange rate of the yen has started a significant wave this year, with the yen falling from 141 at the end of last year to more recently than 150.
Is this yet another move to prepare to pay for the United States?