MBA Japan

Japanese Economy


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Between 1960 and 1990 Japan economy experimented great changes, its growth has been spectacular: a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s.

The second largest industrialised free market economy is in Japan, this economy is highly efficient and competitive in areas linked to international trade, but productivity is far lower in areas such as agriculture, distribution, and services.

The Japanese big group of industrial leadership and technicians, well-educated and industrious work force, high savings and investment rates, and powerful promotion of the industry, development and foreign trade have generated a mature industrial economy. Japan does not have a lot of natural resources, and trade helps it earn the foreign exchange needed to purchase raw materials for its economy.

After obtaining one of the highest economical growth rates in the world from the 1960s until 1980s, the Japanese economy slowed in a dramatic way in the early 1990s, when the "bubble economy" fell in, bringing about plummeting stock and real estate prices.

Japan's short-term economic continues to improve. Strong real GDP growth is supported by dramatically increasing industrial production and rapid growth in machinery orders. Requirement for Japanese goods from China is likely to stay brisk, and requirement from the US is likely to pick up in 2004, so that export growth will also stay buoyant over the year, further helping to underpin the recovery in domestic demand.

Japan's Economy Facts

  • One notable characteristic of the economy is the team work of manufacturers, suppliers, and distributors in closely-knit groups called keiretsu.

  • A second basic feature has been the guarantee of lifetime employment for a substantial portion of the urban labor force.

  • The most important sector of the economy is heavily dependent on imported raw materials and fuels.

  • The much smaller agricultural sector is highly subsidized and protected, with crop yields among the highest in the world.

  • Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch.

  • Robotics constitutes a key long-term economic strength with Japan possessing 410,000 of the world's 720,000 "working robots."

Economy Statistics

These are some of the most important statistics of Japan's economy:

Economy of Japan
Currency 1 Japanese Yen (¥JPY)
Fiscal year 1 April – 31 March
Trade organisations APEC, WTO and OECD
GDP Ranking 3rd by volume (at PPP) (2005); 12th by per capita (at PPP) (2005)
GGDP Purchasing power parity - $4.018 trillion (2005 est.)
GDP-real growth rate 2.7% (2005 est.)
GDP-per capita Purchasing power parity - $31,500 (2005 est.)
GDP-composition by sector Agriculture: 1.3%
Industry: 25.3%
Services: 73.5% (2005 est.)
Inflation -0.5% (2004 est.)
Labor force 66.4 million (2005 est.)
Labor force - by occupation Agriculture: 4.6%
Industry: 27.8%
Services: 67.7% (2004)
Unemployment rate 4.3% (2005 est.)
Budget Revenues: $1.429 trillion expenditures: $1.775 trillion; including capital expenditures (public works only) of about $71 billion (2005 est.)
Trading Partners
Industries Among world's largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, processed foods
Industrial production growth rate 1.3% (2005 est.)
Electricity - production 1.017 trillion kWh (2003)
Electricity - consumption 946.3 billion kWh (2003)
Electricity – exports 0 kWh (2003)
Electricity - imports 0 kWh (2003)
Agriculture - products Rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish
Exports $550.5 billion f.o.b. (2005 est.)
Exports - partners US 22.7%
China 13.1%
South Korea 7.8%
Taiwan 7.4%
Hong Kong 6.3% (2004)
Imports $451.1 billion f.o.b. (2005 est.)
Imports - partners China 20.7%
US 14%
South Korea 4.9%
Australia 4.3%
Indonesia 4.1%
Saudi Arabia 4.1%
UAE 4% (2004)
Public finances
Public debt 164.3% of GDP (2004) 98% of these are domestic debt.
Debt - external $1.545 trillion (31 December 2004)
Revenues $1,401 billion (2004)
Expenses $1,748 billion (inc. $71 billion in capital expenditures) (2004)
Economic aid - donor ODA, $8.9 billion (2004)

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