An interesting event in 2023 is that Germany's GDP has surpassed Japan to become the world's third-largest economy, while Japan has retreated to the world's fourth-largest economy. The last time Japan ranked fourth in the world was in 1961.
In terms of economic symmetry, 2012 was the highest point of Japan's GDP27 trillion dollars, 11 years ago was 2001, GDP was 4$37 trillion. In the next 11 years, 2023, Japan's GDP will be 421 trillion US dollars, which is basically the same, that is, Japan's GDP has entered a downward channel almost since 2012, of course, this decline is also a spiral, but this general direction has not changed.
Germany's GDP surpassed Japan's this year, which may make many people wonder that due to the impact of the Russia-Ukraine conflict and economic decoupling, the German economy has suffered a heavy setback, and there will be negative growth in 2023, down 04%, while Japan's GDP increased by 19%, Japan's GDP is already higher than Germany's, and its economic growth rate is also higher than Germany's, why is it still overtaken by Germany?
The reason is actually very simple, there are two, one is inflation, and the other is the exchange rate.
First, there will be a rare large inflation in Japan in 2023, you must know that Japan used to be deflationary, and inflation has pulled up Japan's GDP by a full 38%, so that Japan's nominal GDP reached.
to 57%, surpassing China for the first time in 46 years.
But Japan is still dwarfed by Germany's inflation, which has pushed GDP up by 64%, so even if the real GDP growth is negative 04%, nominal GDP is still as high as 6%, surpassing Japan.
Second, there is the exchange rate, if you only look at the nominal GDP. Even with the exchange rate, Germany's nominal GDP is only 0.0 percent higher than Japan's3%, still unable to surpass Japan. However, in 2023, the yen has depreciated by 7 against the dollar6%, while the euro appreciated by 3 against the dollar1%, the gap between this rise and fall is large.
Therefore, these two factors have led to Germany's GDP surpassing that of Japan in dollar terms. In 2023, Germany's GDP reached 446 trillion dollars, while Japan has only 4At $21 trillion, Germany is $250 billion higher than Japan.