Japan falls to the fourth-largest economy, yielding to Germany, as it plunges into recession due to a weak yen and ageing population. Structural reforms are urged by Yoshitaka Shindo to spur growth. Japan's economic woes signal the need for urgent action to address demographic challenges and regain competitiveness.
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#Japan #Japaneconomy #Recession #Yen #IMF #Germany #India #Worldeconomy #Financenews #Oneindia #Oneindia News
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NewsTranscript
00:00 Japan, once the global economic powerhouse, is now facing a significant setback as it
00:06 is slipping to fourth position being surpassed by Germany as the economy is plunging into
00:12 a recession.
00:14 This downturn reflects a confluence of factors including currency fluctuations, an ageing
00:19 population and economic vulnerabilities.
00:23 The economic landscape of Japan has undergone a notable shift, with its nominal GDP growing
00:29 by 1.9 percent in 2023, but its standing in dollar terms diminished to $4.2 trillion compared
00:36 to Germany's $4.5 trillion.
00:39 This transition underscores the impact of the year's depreciation against the dollar
00:43 adversely affecting export profits and contributing to the economic decline.
00:49 In contrast, Germany, buoyed by robust economic-driven growth and grappling with similar demographic
00:54 challenges, has somehow ascended to third position globally.
00:58 However, it faces its own set of challenges including energy price surges due to geopolitical
01:04 tensions, labor shortages and rising interest rates.
01:08 While a weaker yen has benefited the Japanese exporters, the country contends with a severe
01:13 labor shortage exacerbated by a declining birth rate.
01:17 Despite the efforts to incentivize workforce participation and attract foreign talent,
01:22 Japan's labor market struggles persist, threatening economic sustainability.
01:27 Yoshitaka Shindo, Japan's economic revitalization minister, emphasizes the urgency of structural
01:33 reforms to stimulate growth, advocating for an increased female workforce participation
01:38 and foreign investment facilitation.
01:40 Addressing these issues is paramount to revitalizing Japan's economy and regaining its competitive
01:46 edge in the global market.
01:49 Recent economic data reveals Japan's grim reality with real GDP contracting 0.1 percent
01:53 in the last quarter of 2023, marking two consecutive quarters of decline and plunging the nation
01:59 into recession.
02:01 Weak consumer spending, compounded by stagnant wages and rising costs, exacerbates the economic
02:07 crisis.
02:08 And the worst part is that the slide is unlikely to end here.
02:12 India's economy, buttressed by a large and growing young population, is projected to
02:16 overtake Japan in 2026 and Germany the following year, according to the International Monetary
02:22 Fund.
02:23 Japan's slip to the fourth position underscores the deeper structural challenges and necessitates
02:28 the urgent economic reform to reignite growth and competitiveness.
02:32 Failure to address these issues risks further economic deadlines and undermines Japan's
02:37 global standing.
02:38 As Japan grapples with its economic downturn and dwindling global influence, there is a
02:43 growing consensus among policymakers and economists that decisive action is needed to navigate
02:49 the country towards sustainable growth and prosperity.
02:57 (gentle music)
03:00 [BLANK_AUDIO]