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Country Fact Sheet - Economy
Economy | Government | People | Transportation | Geography | Communications | Military
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. In addition, the 10-year 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, was completed in October 2007, marking a major milestone in the process of structural reform. Nevertheless, 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.
Agriculture Products
rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish
Budget
revenues: $1.448 trillion expenditures: $1.597 trillion (2007 est.)
Currency
yen (JPY)
Current Account Balance
$212.8 billion (2007 est.)
Debt External
$1.492 trillion (30 June 2007) Stock of direct foreign investment - at home$109 billion (2007 est.)
Economic Aid Donor
ODA, $11.19 billion (2006) Reserves of foreign exchange and gold: $954.1 billion (31 December 2007 est.)
Electricity Consumption
974.2 billion kWh (2005)
Electricity Exports
0 kWh (2005)
Electricity Imports
0 kWh (2005)
Electricity Production
1.025 trillion kWh (2005)
Exchange Rates
yen per US dollar - 117.99 (2007), 116.18 (2006), 110.22 (2005), 108.19 (2004), 115.93 (2003)
Exports Commodities
transport equipment, motor vehicles, semiconductors, electrical machinery, chemicals
Exports Partners
US 20.4%, China 15.3%, South Korea 7.6%, Taiwan 6.3%, Hong Kong 5.4% (2006)
Exports
$676.9 billion f.o.b. (2007 est.)
Fiscal Year
1 April - 31 March
GDP Composition By Sector
agriculture: 1.4% industry: 26.5% services: 72% (2007 est.)
GDP Per Capita
$33,600 (2007 est.)
GDP Real Growth
2.1% (2007 est.)
GDP Official Exchange Rate
$4.384 trillion (2007 est.)
GDP Purchasing Power Parity
$4.29 trillion (2007 est.)
Household Income
lowest 10%: 4.8% highest 10%: 21.7% (1993)
Imports Commodities
machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials
Imports Partners
China 20.5%, US 11.6%, Saudi Arabia 5.7%, UAE 5.2%, Australia 5%, South Korea 4.4%, Indonesia 4.2% (2006)
Imports
$572.4 billion f.o.b. (2007 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: 1.3% (2007 est.)
Inflation Rate Consumer Prices
0% (2007 est.)
Investment Gross Fixed
23.8% of GDP (2007 est.)
Labor Force By Occupation
agriculture: 4.6% industry: 27.8% services: 67.7% (2004)
Labor Force
66.69 million (2007 est.)
Market Value Of Publicly Traded Shares
$4.737 trillion (2005)
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 Production
4.85 billion cu m (2005 est.)
Natural Gas Proved Reserves
38.02 billion cu m (1 January 2006 est.)
Oil consumption
5.353 million bbl/day (2005)
Oil exports
94,830 bbl/day (2004)
Oil imports
5.425 million bbl/day (2004)
Oil production
125,000 bbl/day (2006)
Oil proved reserves
58.5 million bbl (1 January 2006 est.)
Population below poverty line
NA%
Public debt
195.5% of GDP (2007 est.)
Stock of direct foreign investment abroad
$527.8 billion (2007 est.)
Unemployment rate
3.9% (2007 est.)
Source: CIA World Factbook


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