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Germany to Pass Japan as Third-Largest Economy, Helped by Weak Yen
- Bubqeenn4 3y agoI get the GDP stats, but we already heard how Russia is weaker than Italy, and so on. There is India, Russia, Brazil... Is Germany really bigger than them?
- Wytwwww 3y ago> how Russia is weaker than Italy Isn't it? I don't see how anyone could argue than Germany's economy isn't much bigger than that of Russia or Brazil.
- WhereIsTheTruth 3y agoThe US refer to them as "multiethnic democracies" (2008), I wonder if they'll be split at some point (too big), it's already kinda happening in Brazil, Lula ordered to protect the amazon and "its people" There was a map shared during the CSCE that pictured the different regions of Russia, I can't find the article anymore.. sad
- wolverine876 3y ago> Lula ordered to protect the amazon and "its people" How does protecting the very small minority in the Amazon cause a 'split' of Brazil, in any significant sense? They could create a national park too.
- WhereIsTheTruth 3y agoWhen a leader of a country associate a piece of land with a minority and call it "its people", they acknowledge some form of independence
- wolverine876 3y agoHow does [that] ... cause a 'split' of Brazil, in any significant sense?
- wolverine876 3y ago> There is India, Russia, Brazil... Is Germany really bigger than them? Economically, yes, and for decades if not for your lifetime depending on your age and how we account for East Germany. India and Brazil being in the conversation is a 21st century phenomenon (a very good one!).
- akyuu 3y agohttps://archive.ph/sMRUl https://archive.ph/sMRUl
- alephnerd 3y agoIt's based on conversion of GDP metrics to USD. The JPY has been depreciating less due to Japan and more due to the rapid appreciation of USD post-COVID and post-Interest Rate Hike. It's a larger example of why GDP/GDP PPP tend to not be used alone when analyzing economies.
- dustypotato 3y agoDoesn't that mean that the USD/EUR is deprecating at the same rate thereby balancing this effect ?
- alephnerd 3y agoGood question. The Euro is depreciating as well, but not at the same rate as JPY because Japan has some of the lowest interest rates in the OECD as they didn't have an inflation problem unlike the Eurozone and US. Generally speaking, among major currencies, interest rates are highest in USD, then Euro, and the Yen has largely remained consistent since the 90s
- fomine3 3y agoJapan Yen is the only currency that still continue negative interest and QE. https://tradingeconomics.com/country-list/interest-rate https://tradingeconomics.com/country-list/interest-rate
- dependsontheq 3y agoGermany is wildly underestimated in the current moment. The immigration wave has changed the demographics, Germany is not going to age quickly and it is growing in population.
- zelphirkalt 3y agoGermany has an ever growing pile of problems to solve though. Corruption, lobbyism, undemocratic measures, horrendous education sector, overworked employees in the most critical institutions and jobs (teachers, medical personell, doctors, firefighters, etc.), bad integration policies, failing infrastructure and politicians, who do all they can to make sure it keeps failing, and probably many more. Gemany might not be the worst place. But it definitely has lost a lot of appeal due to all those issues.
- Georgelemental 3y agoHow productive are the new arrivals though?
- deleted 3y ago[deleted]
- constantly 3y agoI saw an article recently that claimed Germany was going to surpass Japan as the third largest economy, aided partially by new arrivals. So I infer they’re pretty productive! Will try to find you a link.
- sally_glance 3y agoSurpassed because of weak Yen, not because of Germany's growth: https://www.bloomberg.com/news/articles/2023-10-24/germany-to-pass-japan-as-3rd-largest-economy-helped-by-weak-yen https://www.bloomberg.com/news/articles/2023-10-24/germany-t...
- dj_mc_merlin 3y agoWell, 90% of the people in my office are immigrants. Pretty productive. Obviously however software engineering has been a very immigrant-heavy industry in Europe for a long time. There's just not enough German software engineers to work the huge capital that it has. When looking at more common jobs, it's quite hard to find a German when you pass by any construction site. In fact, I can speak to a good amount of the workers in my native language.
- KptMarchewa 3y agoGermany is not a lone island. Central Europe countries like Poland, Czechia, Romania or Hungary are very much integrated into German supply chain.
- hef19898 3y agoGerman imports and expoets for July 2023: >> Destinations In July 2023, Germany exported mostly to United States (€13.6B), France (€9.23B), Netherlands (€8.64B), China (€8.27B), and Poland (€6.97B), and imported mostly from China (€12.8B), Netherlands (€8.55B), United States (€7.7B), Poland (€6.43B), and Italy (€6.26B) Source: https://oec.world/en/profile/country/deu/ https://oec.world/en/profile/country/deu/
- KptMarchewa 3y agoNetherlands are doing a great job at being a port of Europe.
- hef19898 3y agoFor a lot of reasons, and they do great in deed!
- orbital-decay 3y agoNot everything can be measured by money and bulk volume; some things are measured by vitality and irreplacement. How do you measure CERN or ASML?
- hef19898 3y agoIn twrms of supply chains, industry and international trade? Not at all. Except for ASMLs imports and exports.
- dj_mc_merlin 3y agoRomania is just barely behind Finland as the eastern most mainland EU country. Do you have any argument for calling it Central European?
- anonyfox 3y agoGermany has its problems, but the critical issues are mostly down to 3 things: - energy policies of the past decades was a desaster, mostly ruined by the conservatives. Germany was at some point a pioneer of solar tech, but it got crushed by economic policies favoring fossils, now china owns the majority of this rapidly growing market, and Russian pipelines are gone. - extremely strong car manufacturer lobby that gets heavy subsidies and economic policies favoring car infrastructure. Public transport got defunded/privatized, transitioning to non-fossil transport options is fought tooth and nail, with heavy propaganda, so that many citizens even are aligned with that. - heavy industry/manufacturing is a big chunk of BIP. Directly hit by the energy price hikes. … all of which in general can be solved with cheap/abundant energy. Turning the expensive fossil dependency into green energy would be a literal multiplier for everything else in the country. We don’t have nuclear energy anymore (wrong decision imo) but lots of EU neighbors that do and help us in times of need. It’s not even a technical problem anymore, and we have a shit ton of SME across the country that can engineer stuff. It’s purely a lobbyism/corruption problem with political will and media campaigns. Right now we have a Green Party in our government and they get an absurd amount of flak for trying to turn the ship around after decades of conservative corruption and mismanagement. Everything they do gets spinned into doomsday speech from the right to the point of blatant lying, and ordinary people just want to believe it. I have no idea how to fix these hatestorms and misinformation amounts going around. But the point is: if we somehow manage to get into large scale renewable energy, BIP will skyrocket.
- blueflow 3y ago> Public transport got defunded/privatized Source? I haven't seen any of that. With the Deutschlandticket, stuff even got cheaper.
- anonyfox 3y agoPrivatization of deutsche Bahn comes to mind, and Deutschlandticket is actively being sabotaged by the neoliberals, so it might no longer exist next year for „fiscal reasons“ - even though it costs less than some miles of just another autobahn in berlin
- Jeff_Brown 3y ago"Helped by weak yen" is a little misleading. It suggests the exchange rate exogenously impacts the relative value of an economy's output. If Japan was producing a ton of good stuff, and then its money devalued, why would that reduce the value of what it made? In fact, of course, exchange rates are endogenous. The value of the yen reflects (among other things) the relative value of what Japan makes to what other countries make. If a currency's value falls (and there was no change in the money supply) what it means is people value that country's output this year less than they did last year.
- deleted 3y ago[deleted]
- Retric 3y agoExchange rates reflect cash flows not just total economic output. Foreign investors poring money into a country will prop up exchange rates even without any changes in total economic output. Similarly outflows from foreign investment dividends depress exchange rates.
- wolverine876 3y agoI thought (not being in finance) that the exchange rate reflects supply and demand for Yen, which depends on: * Demand for products sold internationally and denominated in Yen (not US dollars, for example). * Demand due to perceived risk of the Yen's future value * Supply of Yen printed by the government * Supply due to Yen sold to purchase imports Maybe some other things I'm not thinking of.
- xyzzy4747 3y agoThe Yen will ultimately go to zero as Japan ages and depopulates. Germany is boosted by greater immigration, but otherwise native Germans aren’t having many kids either.
- keiferski 3y agoInteresting to compare the optimism in the article and comments with a recent video by Peter Zeihan: The End of Germany as a Modern Economy. https://youtu.be/xmEhTFjQB1g?si=C02yoH1nFWmzWPlQ https://youtu.be/xmEhTFjQB1g?si=C02yoH1nFWmzWPlQ