TOKYO: Japan unexpectedly slid into a recession as its economy contracted for two consecutive quarters. In the final three months of 2023, the country’s gross domestic product (GDP) plummeted by a worse-than-anticipated 0.4% compared to the previous year, following a 3.3% shrinkage in the preceding quarter.
Figures from Japan’s Cabinet Office suggest it may have surrendered its status as the world’s third-largest economy to Germany. Contrary to economists’ expectations of over 1% growth in the fourth quarter, the initial readings reveal a downturn, subject to potential revisions.
Japan Surprisingly Slips into Recession: Report
A technical recession is commonly defined by two consecutive quarters of economic contraction. The International Monetary Fund (IMF) forecasts Germany’s ascension to the third-largest economy spot, dependent on the final economic growth figures from both nations.
Economist Neil Newman noted Japan’s economy at $4.2tn (£3.3tn) in 2023, slightly below Germany’s $4.4tn, partly attributed to the yen’s depreciation against the dollar. Despite the yen’s weakness benefiting exporters and propelling stock prices, Japan’s central bank might defer raising borrowing costs, given the bleak GDP outlook.
