According to a report by Kyodo News Agency on the 23rd, the International Monetary Fund (IMF) recently predicted that Japan's nominal gross domestic product (GDP) will drop from third to fourth in the world in 2023, which will be surpassed by Germany. The depreciation of the Japanese yen has led to a decrease in GDP converted into US dollars, and in addition, nominal GDP is affected by price changes, thus Germany's higher price increase compared to Japan is also reflected.
The report states that GDP is greatly affected by exchange rates, and the actual ranking will be influenced by exchange rate movements before the end of the year. But Japan's low economic growth has persisted for a long time. The economic scale is linked to international influence, and once overtaken by Germany, Japan's sense of presence will further decrease.
The economic forecast data released by the IMF shows that Japan's nominal GDP in 2023 is approximately $4.2308 trillion (approximately RMB 30.95 trillion), a decrease of 0.2% compared to the previous year. On the other hand, Germany grew by 8.4% to approximately $4.4298 trillion.
According to the Bank of Japan, the average exchange rate of the Japanese yen against the US dollar in the Tokyo foreign exchange market was around 131.5 yen per dollar in 2022, and has recently depreciated significantly to around 150 yen. On the other hand, the exchange rate between the euro and the US dollar has not changed as much as the Japanese yen.
On a monthly basis, the price increase in Japan will remain roughly above 3% year-on-year in 2023. On the other hand, Germany reached around 9% at the beginning of the year and gradually slowed down to over 4% in September.