Japan’s Economic Slide to Fifth Place Raises Macro Concerns
Japan's anticipated fall to the world's fifth-largest economy by 2026 marks a pivotal moment for Asian economic hierarchies. The IMF projection shows India overtaking Japan, compounding pressures on Prime Minister Takaichi's growth strategy amid demographic decline and trade headwinds.
September's quarterly contraction—the first in six quarters—reflects the vulnerability of export-reliant economies to protectionist policies. Yet economists see 0.9% growth in 2024 as monetary stimulus and household spending offset structural challenges.
Mizuho's Koshiyama warns unresolved yen volatility and China relations could derail recovery. The coming US-Japan trade agreement may provide stability, but productivity reforms in growth sectors remain imperative for long-term competitiveness.
