The gap between the world’s fourth and third-largest economies is narrowing. There is a $100 billion gap between Germany and Japan. They have a chance to regain the place lost after China’s success.
In 2021, the gap between Germany and Japan will be $700 billion. – The GDP of both countries was 4.2 trillion and 4.9 trillion respectively. Japan’s income has since shrunk to $4.409 trillion, while Germany’s has grown to $4.308 trillion, according to the IMF. So the difference between the two countries is only $100 billion. It may disappear when the exchange rate changes from the yen to the euro.
Germany ahead of Japan
Per capita income in Germany is already higher than in Japan. In Germany, with a population of 84 million, the nominal income is 51,000. hole. per person, and in Japan, where 124 million people live, the income per person is 35,000. hole. Taking into account the difference in purchasing power of currencies, the difference is smaller, but still in favor of Berlin – 66 to 52 thousand. hole.
The symbolic advantage of Germany can be seen in the car market in 2022. Volkswagen ($295 billion in revenue) passed Toyota ($279 billion) to take the top spot among the world’s largest auto companies.
The advantage of a weak currency
Other European countries play in a different league. Britain ($3.1 trillion) is grappling with the fallout from Brexit and France ($2.9 trillion) is struggling to implement reforms. With $750 billion of national income, Poland has an economy six times smaller than Germany’s.
While the German economy grew after Gerhard Schroeder’s reforms in the early 21st century, Japan stagnated. There was also a currency effect. The size of the economy is measured in dollars. While the euro was stable against the dollar, the yen fell by a third against the US currency. In terms of economic growth, a weak currency is an advantage for Japan. The Land of the Rising Sun gained 6% in the second quarter of this year. growth, while Germany faces a recession.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
