Japan slips into a recession and loses its spot as the world’s third-largest economy

Japan's economy has fallen to the worlds fourth largest, trailing behind (1)USA (2) China (3) Germany, due to a contraction in Q4 of 2023. The Japanese govt. reported a 0.4% annual rate decline in GDP for Oct-Dec, accompanied with two consecutive quarters of contraction that would be indicative of a technical  recession. Japan's economy was previously the second largest economy in the world until 2010, faced a weaker yen contributing to its fall, alongside challenges like lagging productivity / competitiveness and a declining population. 

Economic outlook appears bleak currently in Japan, and a gap between developed nations like Japan anda emerging economies is narrowing as countries like India are expected to surpass Japan in nominal GDP in the coming years. Faced with a labor shortage, Japan will have to seek solutions to increase production with immigration being a possible fix. Unfortunately, Japan has been reluctant in the past to accept foreign labor which has lead to criticism regarding lack of diversity and discrimination within the workforce.Another solution for the labor shortage could be the implementation of robots. They are being considered as a possibility but have not reached the level that is equivalent of human workers.

Source: https://apnews.com/article/japan-economy-2023-gdp-893d53deba654c4924e4924f0b321cc5