Bronze medal
14 years after losing its position as the world’s second-largest economy to China, Japan has been relegated to 4th in the global standings, as the Asian superpower unexpectedly slipped into a technical recession in the final quarter of last year. The news caps a sluggish decade... which capped another sluggish decade… which capped a “lost decade” for the Japanese economy in the 1990s, having been plagued by stubbornly low inflation, limited productivity gains, and an aging population.
Stepping into the medal positions is Germany, which saw its nominal GDP (measured in USD) reach $4.46 trillion based on last year's average exchange rate. Despite this technical milestone, Germany faces its own set of challenges: the European economy is only 0.7% larger in real terms than it was pre-pandemic, as it wrestles with higher energy prices, a slowdown in its main export market (China), and the complexities of transitioning its heavy-manufacturing industries to green energy.
US vs. the rest
The UK also announced that it had entered into a recession at the end of last year, with a 0.3% contraction in the final 3 months. With China also adjusting to a slower pace of economic progress, the US remains something of an anomaly, with GDP growing 3% last year as America waited for a recession that never came.
