The Economy of Japan

Key Indicators

  2006 2007 2008 2009 2010
GDP $4.38T $4.89T $5.07T $5.39T $5.68T
Unemployment Rate 3.85% 3.99% 5.08% 5.15% 4.99%
Population 127.76M 127.69M 127.55M 127.37M 127.19M

Featured Economic Indicators [ View all 1100 Economic Indicators ]

Gross Domestic Product (Percent change) Gross Domestic Product (U.S. dollars)
Per Capita Gross Domestic Product  (U.S. dollars) GDP (Purchasing Power Parity) (Current international dollar)
Investment (Percent of GDP) Gross national savings (Percent of GDP)
Inflation average consumer prices (Index) Inflation average consumer prices (Percent change)
Inflation (Index) Inflation (Percent change)
Unemployment rate (Percent of total labor force) Labor Force (Persons)
Population (Persons) Government revenue (National currency)
Government revenue (Percent of GDP) Government expenditure (Percent of GDP)
Government net lending/borrowing (Percent of GDP) Government structural balance (Percent of potential GDP)
Government primary net lending/borrowing (Percent of GDP) Government net debt (Percent of GDP)
Government gross debt (Percent of GDP) Current account balance (U.S. dollars)
Current account balance (Percent of GDP)  

Economic Overview of Japan

Japan Map
Government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan advance with extraordinary rapidity to the rank of second most technologically powerful economy in the world after the US and the third-largest economy in the world after the US and China, measured on a purchasing power parity (PPP) basis. One notable characteristic of the economy has been how manufacturers, suppliers, and distributors have worked together in closely-knit groups called keiretsu. A second basic feature has been the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features have now eroded. Japans industrial sector is heavily dependent on imported raw materials and fuels. The tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self sufficient in rice, Japan must import about 60% of its food on a caloric basis. Japan maintains one of the worlds largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of overinvestment and an asset price bubble during the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. From 2000 to 2001, government efforts to revive economic growth proved short-lived and were hampered by the slowing of the US, European, and Asian economies. In 2002-06, growth improved and the lingering fears of deflation in prices and economic activity lessened. Japans huge government debt, which totals 176% of GDP, and the aging of the population are two major long-run problems. Some fear that a rise in taxes could endanger the current economic recovery. Debate also continues on the role of and effects of reform in restructuring the economy, particularly with respect to the 2007-17 privatization of Japan Post, which has functioned not only as the national postal delivery system but also, through its banking and insurance facilities, as Japans largest financial institution.

Nation History

Japan Map
In 1603, a Tokugawa shogunate (military dictatorship) ushered in a long period of isolation from foreign influence in order to secure its power. For 250 years this policy enabled Japan to enjoy stability and a flowering of its indigenous culture. Following the Treaty of Kanagawa with the US in 1854, Japan opened its ports and began to intensively modernize and industrialize. During the late 19th and early 20th centuries, Japan became a regional power that was able to defeat the forces of both China and Russia. It occupied Korea, Formosa (Taiwan), and southern Sakhalin Island. In 1931-32 Japan occupied Manchuria, and in 1937 it launched a full-scale invasion of China. Japan attacked US forces in 1941 - triggering Americas entry into World War II - and soon occupied much of East and Southeast Asia. After its defeat in World War II, Japan recovered to become an economic power and a staunch ally of the US. While the emperor retains his throne as a symbol of national unity, actual power rests in networks of powerful politicians, bureaucrats, and business executives. The economy experienced a major slowdown starting in the 1990s following three decades of unprecedented growth, but Japan still remains a major economic power, both in Asia and globally.

Source(s): CIA World Factbook