Flag description: white with a large red disk (representing the sun without rays) in the center
Economy
Economy—overview: Government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) have helped Japan advance with extraordinary rapidity to the rank of second most powerful economy in the world. 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; this guarantee is 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 1992-95 largely because of the aftereffects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Growth picked up to 3.9% in 1996, largely a reflection of stimulative fiscal and monetary policies as well as low rates of inflation. But in 1997-98 Japan experienced a wrenching recession, centered about financial difficulties in the banking system and real estate markets and exacerbated by rigidities in corporate structures and labor markets. In early 1999 output has started to stabilize as emergency government spending begins to take hold. The crowding of habitable land area and the aging of the population are two major long-run problems.
GDP: purchasing power parity—$2.903 trillion (1998 est.)
GDP—real growth rate: -2.6% (1998 est.)
GDP—per capita: purchasing power parity?$23,100 (1998 est.)
GDP—composition by sector: agriculture: 2% industry: 38% services: 60% (1997)
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 0.9% (1998 est.)