Germany is now the world’s third-largest economy, after Japan unexpectedly slipped into recession.
Japan’s economy shrank by an unexpected 0.4 percent in the last quarter of 2023, according to figures released by the government. The economy declined by 3.3 percent in the previous three months, meaning the country entered a technical recession.
With a GDP of $4.5 trillion, Germany now sits behind the United States and China in terms of economic heft, and narrowly leads Japan, which has a GDP of $4.2 trillion.
Germany’s economy shrank by 0.3 percent in 2023, with “rising interest rates and weaker domestic and foreign demand” to blame, according to the Federal Statistics Office.
However, last October, the International Monetary Fund projected that Germany’s GDP would indeed eclipse that of Japan in 2024, as the yen’s slide against the dollar continues to cause headaches for policymakers in Tokyo.
Though it has long been Europe’s largest economy, the last time Germany held the number three spot was in 2007, before it was overtaken by China.
