Germany’s economy became the world’s third-largest economy after Japan unexpectedly slipped into recession, POLITICO reports.
Japan’s economy unexpectedly contracted by 0.4 per cent in the last quarter of 2023. In the previous three months, the economy shrank by 3.3 per cent, meaning the country has entered a technical recession.
With a GDP of $4.5 trillion, Germany is now behind the United States and China in terms of economic power and just ahead of Japan with a GDP of $4.2 trillion.
The Federal Statistical Office reports that the German economy will shrink by 0.3 per cent in 2023. Analysts cite “rising interest rates and weakening domestic and external demand” as the reason for this.
However, last October, the International Monetary Fund predicted that Germany’s GDP would actually eclipse Japan’s in 2024 as the yen’s fall against the dollar continues to give policymakers in Tokyo headaches.
Although Germany has long been Europe’s largest economy, it last ranked third in 2007 before being overtaken by China.
