Japan has ceded its spot as the world’s third-largest economy to Germany after its gross domestic product shrank for a second consecutive time in the fourth quarter of 2023, government data released on Thursday showed, pushing the Asian country into an unexpected recession.
The Japanese economy ceded the world's third largest economy title to Germany after reporting that ... [+]
Preliminary data released by the Japanese Cabinet Office showed that Japan’s GDP fell an annualized 0.4% in the October-December quarter—the second straight quarter of decline after a 3.3% annualized drop in the previous three-month period.
According to Bloomberg, the fourth quarter’s numbers were well below economists' forecasts of around 1.1% growth.
Private consumption, which makes up for more than half of Japan’s economic activity, shrunk by 0.2% in the fourth quarter as households tightened discretionary spending due to spiraling living costs.
With a nominal GDP of $4.2 trillion in 2023, Japan’s economy is now smaller (in U.S. dollar terms) than Germany’s $4.4 trillion, despite the latter’s economy shrinking 0.3% last year.
This is a developing story.