Japan has lost its place as the world's third-largest economy to Germany.

Japan's nominal Gross Domestic Product for 2023 came to 591.5 trillion yen, or some 4.2 trillion dollars based on last year's average exchange rate. Germany's preliminary GDP surpassed Japan's to stand at nearly 4.5 trillion dollars.

The Japanese economy was the world's second largest for decades from 1968. But China surged past in 2010, leaving Japan third until 2022. Germany's population is about two-thirds the size of Japan's.

Since Japan's economic bubble burst in the early 1990s, prolonged slow growth and deflation have curbed both consumer spending and corporate investment.
While the weak yen lowers the value of Japan's economy in dollar terms, higher inflation in Germany has helped boost nominal German GDP growth.