Japan's economy is in danger of lagging behind India. There was a time when Japan's economy was growing at the speed of a rocket. In the year 1993, the size of Japan's economy was 4.54 trillion dollars while India's economy was 280 billion dollars. But today the matter has changed.
Japan was the world's second largest economy till 2010.
New Delhi: There was a time when it was believed that Japan's economy would leave America behind. But today Japan has slipped to fourth place in the list of world's top economies. First China and then Germany went ahead of it. Now India is also expected to overtake Japan soon. IMF says that in 2025, India will become the world's fourth largest economy on the basis of nominal GDP in dollar terms. The size of India's economy will reach 4.34 trillion dollars while Japan's economy will remain at 4.31 trillion dollars. Till 2010, Japan was the second largest economy in the world. Only America was ahead of him. But now Japan is in danger of slipping to fifth position. Why did such a situation arise?
Japan's economy was once running at the speed of a rocket and it was believed that it would leave America behind and become the largest economy in the world. 30 years ago, Japan was the second largest economy in the world. At that time India was no match for him. In 1993, the size of Japan's economy was 4.54 trillion dollars, while India's economy was 280 billion dollars. But in the early 1990s, Japan's economy entered a period of recession from which it has not been able to recover till date. In 2010, China became the world's second largest economy by surpassing Japan. Last year, Germany pushed Japan to fourth place. The Bank of Japan started negative interest rates in 2016 to promote spending and investment. Due to this, the yen became no longer attractive for investors around the world. This further reduced the value of the yen.
In 2012, when Shinzo Abe became the Prime Minister of Japan, he made many announcements to bring the country's economy back on track. The Bank of Japan eased monetary policy and provided fiscal stimulus through government spending. It had good results but the country could not move forward on structural reforms. Corona and Ukraine war also affected Japan's economy. According to OECD, Japan's growth is expected to be 0.5%. Experts say that Japan is a developed market and cannot compete with emerging markets like India. Japan will have to invest in technology and human capital for growth. The biggest problem for Japan is the decline of its currency Yen. The yen has recently declined significantly against the dollar and is at its lowest level in 50 years.
Today, while India's economy is growing at rocket speed, Japan has barely escaped recession. According to Forbes, America remains the world's largest economy with $27.974 trillion. China is at second place in this list with 18.566 trillion dollars. Germany, the country with the largest economy in Europe, is at third place in this list. The size of its economy is 4.73 trillion dollars. Japan is the fourth largest economy in the world with $4.291 trillion. India is at fifth place in this list with 4.112 trillion dollars. In the year 2014, India was the tenth largest economy in the world. It took 60 years for the Indian economy to reach one trillion dollars. India reached this milestone in 2007. The size of India's economy reached two trillion dollars in 2014 and three trillion dollars in 2021.
