Japan: Economy

Economy - overview

Government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan advance with extraordinary rapidity to the rank of second most technologically-powerful economy in the world after the US and third-largest economy after the US and China. One notable characteristic of the economy is the working together 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. Both features are now eroding. Industry, 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. Usually self-sufficient in rice, Japan must import about 50% of its requirements of other grain and fodder crops. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades overall real economic growth had been spectacular: a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth have met with little success and were further hampered in 2000-2003 by the slowing of the US, European, and Asian economies. Japan's huge government debt, which is approaching 150% of GDP, and the ageing of the population are two major long-run problems. Robotics constitutes a key long-term economic strength with Japan possessing 410,000 of the world's 720,000 "working robots." Internal conflict over the proper way to reform the ailing banking system continues.

GDP

purchasing power parity - $3.567 trillion (2003 est.)

GDP - real growth rate

2.3% (2003 est.)

GDP - per capita

purchasing power parity - $28,000 (2003 est.)

GDP - composition by sector

agriculture: 1.4%
industry: 30.9%
services: 67.7% (2001 est.)

Population below poverty line

NA%

Household income or consumption by percentage share

lowest 10%: 4.8%
highest 10%: 21.7% (1993)

Distribution of family income - Gini index

24.9 (1993)

Inflation rate (consumer prices)

-0.3% (2003 est.)

Labor force

66.66 million (2003)

Labor force - by occupation

services 70%, industry 25%, agriculture 5% (2002 est.)

Unemployment rate

5.3% (2003)

Budget

revenues: $380 billion
expenditures: $746 billion, including capital expenditures (public works only) of about $71 billion (FY03/04 est.)

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

1.9% (2003 est.)

Electricity - production

1.037 trillion kWh (2001)

Electricity - production by source

fossil fuel: 60%
hydro: 8.4%
other: 1.8% (2001)
nuclear: 29.8%

Electricity - consumption

964.4 billion kWh (2001)

Electricity - exports

0 kWh (2001)

Electricity - imports

0 kWh (2001)

Oil - production

17,330 bbl/day (2001 est.)

Oil - consumption

5.29 million bbl/day (2001 est.)

Oil - exports

93,360 bbl/day (2001)

Oil - imports

5.449 million bbl/day (2001)

Oil - proved reserves

29.29 million bbl (1 January 2002)

Natural gas - production

2.519 billion cu m (2001 est.)

Natural gas - consumption

80.42 billion cu m (2001 est.)

Natural gas - exports

0 cu m (2001 est.)

Natural gas - imports

77.73 billion cu m (2001 est.)

Natural gas - proved reserves

20.02 billion cu m (1 January 2002)

Agriculture - products

rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fish

Exports

$447.1 billion f.o.b. (2003 est.)

Exports - commodities

motor vehicles, semiconductors, office machinery, chemicals

Exports - partners

US 28.8%, China 9.6%, South Korea 6.9%, Taiwan 6.3%, Hong Kong 6.1% (2002)

Imports

$346.6 billion f.o.b. (2003 est.)

Imports - commodities

machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)

Imports - partners

China 18.3%, US 17.4%, South Korea 4.6%, Indonesia 4.2%, Australia 4.1% (2002)

Debt - external

$NA (2002 est.)

Economic aid - donor

ODA, $7 billion (FY03/04)

Currency

yen (JPY)

Currency code

JPY

Exchange rates

yen per US dollar - 115.93 (2003), 125.39 (2002), 121.53 (2001), 107.77 (2000), 113.91 (1999)

Fiscal year

1 April - 31 March