Japan Economy 2008

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 has been how manufacturers, suppliers, and distributors have worked 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 have now eroded. 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 55% 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 and an asset price bubble during the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. From 2000 to 2001, government efforts to revive economic growth proved short lived and were hampered by the slowing of the US, European, and Asian economies. In 2002-07, growth improved and the lingering fears of deflation in prices and economic activity lessened, leading the central bank to raise interest rates to 0.25% in July 2006, up from the near 0% rate of the six years prior, and to 0.50% in February 2007. Japan's huge government debt, which totals 182% 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. Debate also continues on the role of and effects of reform in restructuring the economy, particularly with respect to increasing income disparities and the 2007-17 privatization of Japan Post, which has functioned not only as the national postal delivery system but also, through its banking and insurance facilities, as Japan's largest financial institution.

GDP (purchasing power parity):
$4.305 trillion (2007 est.)

GDP (official exchange rate):
$5.103 trillion (2007 est.)

GDP - real growth rate:
2% (2007 est.)

GDP - per capita (PPP):
$33,800 (2007 est.)

GDP - composition by sector:
agriculture: 1.5%
industry: 25.2%
services: 73.3% (2007 est.)

Labor force:
66.07 million (2007 est.)

Labor force - by occupation:
agriculture: 4.6%
industry: 27.8%
services: 67.7% (2004)

Unemployment rate:
3.8% (2007 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:
38.1 (2002)

Inflation rate (consumer prices):
0% (2007 est.)

Investment (gross fixed):
23.6% of GDP (2007 est.)

Budget:
revenues: $1.463 trillion
expenditures: $1.575 trillion (2007 est.)

Public debt:
182.4% of GDP (2007 est.)

Agriculture - products:
rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish

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% (2007 est.)

Electricity - production:
1.025 trillion kWh (2005)

Electricity - consumption:
974.2 billion kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
125,000 bbl/day (2006)

Oil - consumption:
5.353 million bbl/day (2005)

Oil - exports:
94,830 bbl/day (2004)

Oil - imports:
5.425 million bbl/day (2004)

Oil - proved reserves:
58.5 million bbl (1 January 2006 est.)

natural gas - production:
4.85 billion cu m (2005 est.)

natural gas - consumption:
83.67 billion cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
77.6 billion cu m (2005)

natural gas - proved reserves:
38.02 billion cu m (1 January 2006 est.)

Current account balance:
$201.3 billion (2007 est.)

Exports:
$665.7 billion f.o.b. (2007 est.)

Exports - commodities:
transport equipment, motor vehicles, semiconductors, electrical machinery, chemicals

Exports - partners:
US 22.8%, China 14.3%, South Korea 7.8%, Taiwan 6.8%, Hong Kong 5.6% (2006)

Imports:
$571.1 billion f.o.b. (2007 est.)

Imports - partners:
China 20.5%, US 12%, Saudi Arabia 6.4%, UAE 5.5%, Australia 4.8%, South Korea 4.7%, Indonesia 4.2% (2006)

Economic aid - donor:
ODA, $8.9 billion (2004)

Reserves of foreign exchange and gold:
$881 billion (2006 est.)

Debt - external:
$1.492 trillion (30 June 2007)

Stock of direct foreign investment - at home:
$88.62 billion (2006 est.)

Stock of direct foreign investment - abroad:
$459.6 billion (2006 est.)

Market value of publicly traded shares:
$4.737 trillion (2005)

Currency (code):
yen (JPY)

Exchange rates:
yen per US dollar - 117.99 (2007), 116.18 (2006), 110.22 (2005), 108.19 (2004), 115.93 (2003)