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 the third-largest economy in the world after the US and
China, measured on a purchasing power parity (PPP) basis. One
notable characteristic of the economy is how manufacturers,
suppliers, and distributors work together 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. Japan's industrial sector is
heavily dependent on imported raw materials and fuels. The tiny
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 60% of its food on a caloric basis.
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 and to force a
restructuring of the economy. From 2000 to 2003, government efforts
to revive economic growth met with little success and were further
hampered by the slowing of the US, European, and Asian economies. In
2004 and 2005, growth improved and the lingering fears of deflation
in prices and economic activity lessened. Japan's huge government
debt, which totals 170% of GDP, and the aging of the population are
two major long-run problems. Some fear that a rise in taxes could
endanger the current economic recovery. Internal conflict over the
proper way to reform the financial system will continue as Japan
Post's banking, insurance, and delivery services undergo
privatization between 2007 and 2017.
GDP (purchasing power parity):
$4.025 trillion (2005 est.)
GDP (official exchange rate):
$4.664 trillion (2005 est.)
GDP - real growth rate:
2.6% (2005 est.)
GDP - per capita (PPP):
$31,600 (2005 est.)
GDP - composition by sector: agriculture: 1.7% industry: 25.8% services: 72.5% (2005 est.)
Labor force: 66.4 million (2005 est.)
Labor force - by occupation: agriculture: 4.6% industry: 27.8% services: 67.7% (2004)
Unemployment rate:
4.4% (2005 est.)
Population below poverty line:
NA%