Japan, world's third largest economy, is very vulnerable to the global economic situation, due to its strong dependence on exports. In the recent years, its economy has experienced periods of recession due to the slowdown of the global economy and the earthquake and the following tsunami which it experienced in 2011. In 2013, growth remained weak (1%) with a shortfall in domestic demand and exports well below their potential. For 2014, the outlook remains equally grim (1.2%) and consumption seems to be affected by the rise in VAT>
In 2013, the proactive policy led by the prime minister Shinzo Abe, whose goal was to help the country overcome deflation, contributed to the economy's stability. Three stimulus measures have been implemented: a massive support for economic activity worth 132 billion euro; an agressive monetary policy aiming to reduce inflation to below 2% in two years; and a deregulation of the labour market. The 2014 budget contains measures aiming to mitigate the potential negative impact of the rise in VAT such as an increase in public spending in the areas of public works, social security and defense. It will be partially funded (43%) by the emission of new state bonds. The budget, which should reach more than 941 billion USD, has been criticized by the opposition as unlikely to remedy the country's financial ills, given that its state debt already exceeds 200% of the GDP. The Central Bank is trying to fight against deflation which has lasted for over 15 years. Population aging and political tensions with China and South Korea are also a source of concern.
The unemployment rate increased under the effects of the crisis, but it remains moderate at about 5%.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||5,905.63||5,937.86||4,898.53||4,769.80e||4,881.91|
|GDP (Constant Prices, Annual % Change)||-0.5||1.5||1.5e||0.9||0.8|
|GDP per Capita (USD)||46,175||46,531||38||37,540e||38,522|
|General Government Balance (in % of GDP)||-8.3||-7.6e||-7.6e||-6.7||-5.5|
|General Government Gross Debt (in % of GDP)||229.8||237.3e||243.2e||245.1e||245.5|
|Inflation Rate (%)||-0.3||-0.0||0.4||2.7||2.0|
|Unemployment Rate (% of the Labor Force)||4.6||4.3||4.0||3.7||3.8|
|Current Account (billions USD)||126.47||58.68||33.63e||45.42e||54.92|
|Current Account (in % of GDP)||2.1||1.0||0.7||1.0||1.1|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
Japan has few natural resources (some deposits of gold, magnesium, coal and silver), therefore, it depends from exports to supply itself with raw materials and energy resources. Having a large maritime area, the country is one of the first producers of halieutic (fishing) products. Only 15% of Japan's surface is suitable for cultivation. Tea and rice are the two main crops. The agricultural sector is highly subsidized and protected. Agriculture contributes marginally to the GNP and employs less than 4% of the active population.
The industrial sector is very diversified and it covers basic products (steel, paper), as well as high technology products. Japan dominates the sectors of automobile, robotics, biotechnology, nanotechnology and renewable energy. Japan is the world’s second producer of cars and ships. The industrial sector contributes to nearly 30% of the GNP.
The service sector accounts for more than 70% of the GDP and employs nearly 70% of the active population.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||3.7||25.3||69.7|
|Value Added (in % of GDP)||1.2||25.6||73.2|
|Value Added (Annual % Change)||0.3||-1.6||2.2|
Source: World Bank - Last Available Data.
|Japanese Yen (JPY) - Average Annual Exchange Rate For 1 USD||93.57||87.78||79.81||79.79||97.60|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Foreign trade is an essential element of the Japanese economy, but the country is not sufficiently open and imposes extensive non-tariff barriers, especially in the agricultural sector. The country is currently negotiating a number of free-trade agreements, including with the EU and the Transpacific partnership. Japan ranks fourth as a global importer and exporter of goods (2012) and trade represents around 30% of the Japanese GDP.
Japan's trade balance has been negative since 2011: exports dropped as a result of the global slowdown and the proven risks of contamination of the food chain following the Japanese nuclear disaster. Meanwhile, imports have increased due to purchases related to energy production and their cost has risen due to the weak yen. In 2013, the deficit reached a record level of $112b, a 65% increase compared to 2012.
The main trade partners of Japan are the United States, China, Southeast Asia and Saudi Arabia.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||551,981||694,059||855,380||885,843||833,166|
|Exports of Goods (million USD)||580,719||769,839||823,184||798,568||715,097|
|Imports of Services (million USD)||146,965||155,613||165,727||174,924||160,941|
|Exports of Services (million USD)||125,918||138,703||142,551||142,489||143,890|
|Imports of Goods and Services (Annual % Change)||-15.7||11.1||5.9||5.3||3.1|
|Exports of Goods and Services (Annual % Change)||-24.2||24.4||-0.4||-0.2||1.5|
|Imports of Goods and Services (in % of GDP)||12.3||14.0||16.0||16.7||19.0|
|Exports of Goods and Services (in % of GDP)||12.7||15.2||15.1||14.7||16.2|
|Trade Balance (million USD)||58,092||108,524||-4,474||-53,484||-89,648|
|Trade Balance (Including Service) (million USD)||23,252||74,859||-42,905||-103,986||-125,128|
|Foreign Trade (in % of GDP)||25.0||29.1||31.2||31.3||35.1|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||45.3%|
(% of Imports)
|United Arab Emirates||5.1%|
|See More Countries||52.2%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2014|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||13.0%|
|Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s.||4.8%|
|Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies||3.7%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||2.0%|
|Cruise ships, excursion boats, ferry-boats, cargo...Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods||1.8%|
|See More Products||74.8%|
|- bn USD of products imported in 2014|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||15.9%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||10.3%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||3.0%|
|Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||2.4%|
|Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal||2.4%|
|See More Products||66.0%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2011|
|Merchanting and other trade-related...Merchanting and other trade-related services||16.39%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||12.35%|
|Research and developmentResearch and development||2.90%|
|Operational leasing servicesOperational leasing services||2.43%|
|Sea transportSea transport||20.90%|
|Air transportAir transport||5.43%|
|Franchises and similar rightsFranchises and similar rights||18.84%|
|Personal travelPersonal travel||5.83%|
|Business travelBusiness travel||1.71%|
|- bn USD of services imported in 2011|
|Sea transportSea transport||20.56%|
|Air transportAir transport||8.90%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||19.70%|
|Research and developmentResearch and development||6.34%|
|Merchanting and other trade-related...Merchanting and other trade-related services||7.39%|
|Operational leasing servicesOperational leasing services||0.29%|
|Personal travelPersonal travel||13.86%|
|Business travelBusiness travel||2.38%|
|Franchises and similar rightsFranchises and similar rights||6.19%|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014