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Economy of Japan
Japan's industrialized, free-market economy is the world's third-largest by
purchasing power parity (PPP) after the United States and China, and
second-largest by market exchange rates. Its economy is highly efficient and
competitive in areas linked to international trade, but productivity is lower in
areas such as agriculture, distribution, and services. After achieving one of the
highest economic growth rates in the world from the 1960s through the 1980s,
the Japanese economy slowed dramatically in the early 1990s, when the "bubble
economy" collapsed. Its reservoir of industrial leadership and technicians,
well-educated and industrious work force, high savings and investment rates,
and intensive promotion of industrial development and foreign trade have
produced a mature industrial economy. Japan has few natural resources, and
trade helps it earn the foreign exchange needed to purchase raw materials for its
economy.
Sliding stock and real estate prices marked the end of the "bubble economy" of
the late 1980s, and ushered in a decade of stagnant economic growth. Real
GDP in Japan grew at an average of roughly 1.5% yearly between 1991-1999,
compared to growth in the 1980s of about 4% per year. Growth in Japan
throughout the 1990s was slower than growth in other major industrial nations,
and the same as France and Germany. Japan endured periods of recession
around the turn of the millennium, exacerbated by recession in the United States,
but from 2003 began to grow strongly again at 2.0% and this rate has held
steady through 2004 and projected by a survey of economists through 2005.
Japan has already achieved over 5% growth in the first half of 2005.
Japan's industrialized, free-market economy is the world's third-largest by
purchasing power parity (PPP) after the United States and China, and
second-largest by market exchange rates. Its economy is highly efficient and
competitive in areas linked to international trade, but productivity is lower in
areas such as agriculture, distribution, and services. After achieving one of the
highest economic growth rates in the world from the 1960s through the 1980s,
the Japanese economy slowed dramatically in the early 1990s, when the "bubble
economy" collapsed. Its reservoir of industrial leadership and technicians,
well-educated and industrious work force, high savings and investment rates,
and intensive promotion of industrial development and foreign trade have
produced a mature industrial economy. Japan has few natural resources, and
trade helps it earn the foreign exchange needed to purchase raw materials for its
economy.
Sliding stock and real estate prices marked the end of the "bubble economy" of
the late 1980s, and ushered in a decade of stagnant economic growth. Real
GDP in Japan grew at an average of roughly 1.5% yearly between 1991-1999,
compared to growth in the 1980s of about 4% per year. Growth in Japan
throughout the 1990s was slower than growth in other major industrial nations,
and the same as France and Germany. Japan endured periods of recession
around the turn of the millennium, exacerbated by recession in the United States,
but from 2003 began to grow strongly again at 2.0% and this rate has held
steady through 2004 and projected by a survey of economists through 2005.
Japan has already achieved over 5% growth in the first half of 2005.