TOKYO - The Cabinet Office announced that Japan's nominal GDP in 2023 fell to fourth place globally, overtaken by Germany, in dollar terms, partly due to a continued downturn in personal consumption, influenced by rising prices.
The real GDP growth rate was minus 0.1% compared to the previous three months, translating to an annualized decrease of 0.4%.
Personal consumption, which accounts for more than half of GDP, declined in areas such as clothing and dining out due to a tendency towards saving.
Furthermore, Japan's nominal GDP in 2023 fell to fourth place globally in dollar terms, overtaken by Germany.
A Cabinet Office official pointed out that the depreciation of the yen was a significant factor, but "being overtaken by Germany, with only two-thirds of Japan's workforce, indicates Japan's low productivity."
Shinichiro Kobayashi, Chief Researcher at Mitsubishi UFJ Research & Consulting, commented, "After the collapse of the bubble economy, companies have struggled to make aggressive capital investments. This has made it difficult to improve productivity."
Whether Japan can enter a positive cycle of gradual increases in both prices and wages will significantly impact the future of the Japanese economy, with this year's spring labor negotiations playing a crucial role.
Source: ANN
