Japan’s economy is on track to fall behind Germany’s in the global ranking, but policymakers are optimistic that this is mainly due to the weakening of the Japanese yen against the dollar. In fact, when the greenback factor is removed, Japan’s economy may have picked up by 12%. With talks of the central bank raising interest rates for the first time since 2007, Japan may be able to turn its decade-long deflation into healthier prices that support economic growth.
Meanwhile, Germany’s production levels in the industrial sector were 1.6% lower in December than they were in November, reaching a level that is 10% below pre-pandemic levels. While inflation is not yet a major concern for Germany, shoppers are already paying more for less due to price increases. Despite their aging and shrinking populations, both Japan and Germany are still jostling for position on the economic podium.
However, India’s population is growing faster than China and is also younger, giving it an advantage in terms of economic growth. According to the International Monetary Fund, India has a better chance of beating Germany’s economy as soon as 2027 if current trends continue.