Japan Economy Profile 2013

Economy - overview

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's 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 inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Recovery spending helped boost GDP in early 2012, but slower global economic growth began weakening Japan's export-oriented economy by mid-year. Electricity supplies remain tight because Japan tentatively shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Newly-elected Prime Minister Shinzo ABE has declared the economy his government's top priority; he has pledged to reconsider his predecessor's plan to permanently close nuclear power plants and has said he will increase stimulus spending and press the Bank of Japan to loosen monetary policy. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2012 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

GDP (purchasing power parity)

$4.617 trillion (2012 est.)
$4.516 trillion (2011 est.)
$4.551 trillion (2010 est.)
note: data are in 2012 US dollars

GDP (official exchange rate)

$5.984 trillion (2012 est.)

GDP - real growth rate

2.2% (2012 est.)
-0.8% (2011 est.)
4.5% (2010 est.)

GDP - per capita (PPP)

$36,200 (2012 est.)
$35,300 (2011 est.)
$35,500 (2010 est.)
note: data are in 2012 US dollars

GDP - composition by sector

agriculture: 1.2%
industry: 27.5%
services: 71.4% (2012 est.)

Population below poverty line

16% (2010)
note: Ministry of Health, Labor and Welfare (MHLW) press release, 20 October 2009 (2010)

Labor force

65.27 million (2012 est.)

Labor force - by occupation

agriculture: 3.9%
industry: 26.2%
services: 69.8% (2010 est.)

Unemployment rate

4.4% (2012 est.)
4.6% (2011 est.)

Unemployment, youth ages 15-24

total: 9.1%
male: 10.1%
female: 8% (2009)

Household income or consumption by percentage share

lowest 10%: 1.9%
highest 10%: 27.5% (2008)

Distribution of family income - Gini index

37.6 (2008)
24.9 (1993)

Investment (gross fixed)

21.1% of GDP (2012 est.)

Budget

revenues: $2.025 trillion
expenditures: $2.57 trillion (2012 est.)

Taxes and other revenues

33.8% of GDP (2012 est.)

Budget surplus (+) or deficit (-)

-9.1% of GDP (2012 est.)

Public debt

218.9% of GDP (2012 est.)
205.5% of GDP (2011 est.)

Inflation rate (consumer prices)

0.1% (2012 est.)
-0.3% (2011 est.)

Central bank discount rate

0.3% (31 December 2009)
0.3% (31 December 2008)

Commercial bank prime lending rate

1.5% (31 December 2012 est.)
1.48% (31 December 2011 est.)

Stock of narrow money

$6.735 trillion (31 December 2012 est.)
$6.637 trillion (31 December 2011 est.)

Stock of money

$5.417 trillion (31 December 2008)
$4.367 trillion (31 December 2007)

Stock of quasi money

$6.16 trillion (31 December 2008)
$4.779 trillion (31 December 2007)

Stock of broad money

$14.46 trillion (31 December 2011 est.)
$13.41 trillion (31 December 2010 est.)

Stock of domestic credit

$14.65 trillion (31 December 2012 est.)
$14.64 trillion (31 December 2011 est.)

Market value of publicly traded shares

$3.541 trillion (31 December 2011)
$4.1 trillion (31 December 2010)
$3.378 trillion (31 December 2009)

Agriculture - products

rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish

Industries

among world's largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, processed foods

Industrial production growth rate

-3.5% (2011 est.)

Current Account Balance

$84.7 billion (2012 est.)
$119.1 billion (2011 est.)

Exports

$792.9 billion (2012 est.)
$787 billion (2011 est.)

Exports - commodities

motor vehicles 13.6%; semiconductors 6.2%; iron and steel products 5.5%; auto parts 4.6%; plastic materials 3.5%; power generating machinery 3.5%

Exports - partners

China 19.7%, US 15.5%, South Korea 8%, Hong Kong 5.2%, Thailand 4.6% (2011)

Imports

$856.9 billion (2012 est.)
$807.6 billion (2011 est.)

Imports - commodities

petroleum 15.5%; liquid natural gas 5.7%; clothing 3.9%; semiconductors 3.5%; coal 3.5%; audio and visual apparatus 2.7%

Imports - partners

China 21.5%, US 8.9%, Australia 6.6%, Saudi Arabia 5.9%, UAE 5%, South Korea 4.7% (2011)

Reserves of foreign exchange and gold

$1.351 trillion (31 December 2012 est.)
$1.296 trillion (31 December 2011 est.)

Debt - external

$2.719 trillion (30 June 2011)
$2.441 trillion (30 September 2010)

Stock of direct foreign investment - at home

$144.8 billion (31 December 2012 est.)
$144.1 billion (31 December 2011 est.)

Stock of direct foreign investment - abroad

$1.025 trillion (31 December 2012 est.)
$911.5 billion (31 December 2011 est.)

Exchange rates

yen (JPY) per US dollar -
79.42 (2012 est.)
79.81 (2011 est.)
87.78 (2010 est.)
93.57 (2009)
103.58 (2008)

Fiscal year

1 April - 31 March