The International Monetary Fund (IMF) predicts that Japan's nominal gross domestic product (GDP) will be lower than Germany in 2023, falling to fourth place. In the long run, this reflects the sluggish Japanese economy.
The IMF stated the relevant content in its economic outlook released on October 23rd. The nominal GDP includes changes in the prices of goods and services, reflecting the level of economic activity of a country and region. Often used as an indicator of general economic scale.
It is expected that Japan's nominal GDP will decrease by 0.2% year-on-year in 2023, to $4230.8 billion (equivalent to approximately 633 trillion yen), while Germany will increase by 8.4% to $4429.8 billion. The top ranked United States increased by 5.8% to $26949.6 billion.
In 2000, Japan's economy was larger than it is now, at $4968.3 billion, ranking second in the world. At the beginning of 2000, the Japanese yen exchange rate was around 105 yen to the US dollar. At that time, Japan's GDP was 2.5 times that of Germany.
If we observe the nominal GDP growth rate of Japan since 2000, calculated in their respective currencies, it is only 1.1 times. The growth rate is significantly lower than Germany's 1.9 times and the United States' 2.6 times. Based on the real GDP after excluding price changes, Japan's growth rate is 1.2 times, slightly lower than that of the United States and Germany.
In the monthly economic report of March 2001, the Japanese Cabinet acknowledged for the first time that Japan was in a slow deflationary state. Japan has pointed out that households delaying consumption, increasing savings, and businesses suppressing new equipment investment have all had a negative impact on the overall economy. The working age population (aged 15-64) in Japan has also been continuously decreasing since 1995.