Germany, Europe’s largest economy, will surpass Japan in nominal GDP. According to the International Monetary Fund (IMF), Germany’s nominal GDP in 2023 is likely to reverse Japan and become the third largest in the world, after the United States and China.

Is the German economy, directly affected by the Ukraine crisis, really growing? In fact, the German economy faces profound structural problems of „Japanization,“ which could lead to long-term stagnation.

According to IMF forecasts, Germany’s nominal GDP is likely to reach $4.4298 trillion in 2023, surpassing Japan’s $4.2308 trillion. The sharp depreciation of the yen caused the Japanese economy to appear smaller in dollar terms, while the German economy appeared larger in numerical terms due to rising prices caused by inflation.

The current German economy shows no signs of „overtaking Japan“. „We are in a deep and long trough,“ Markus Steinemann, president of the German Chemical Industry Association, expressed a sense of crisis in mid-December 2023. The association is Germany’s largest economic group, with annual sales of 260 billion euros, and a growing number of companies do not expect the business environment to improve until 2025.