Japan Slips Into Recession, Loses Spot as World's No. 3 Economy

Japan Slips Into Recession, Loses Spot as World's No. 3 Economy
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The Facts

  • The Japanese economy declined in Q4 last year due to four-decade high inflation and a weak yen despite projections of moderate growth, pushing the country into a technical recession after economic contraction was reported in two straight quarters.

  • According to the latest data from Japan's Cabinet Office, its GDP fell by 0.4% in the final three months of 2023, compared to a year earlier, after shrinking by 3.3% in Q3.


The Spin

Narrative A

Things look bleak for theJapanese economy. While the Q4 contraction may have been due to a trend in saving money due to inflation, a third consecutive decline is likely between January and March 2024 amid falling exports.

Narrative B

There's room for optimism in Japan, as available data for the current quarter indicates a potential recovery based on exports and on private consumption since inflation is stabilizing and wages are expected to grow.


Metaculus Prediction


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