A new forecast by a Japan-based research institute said India’s economy would overthrow Japan’s reign as the third largest economy in the world in ten years.
The Japan Center for Economic Research (JCER) report stated that India’s rise will coincide with China’s as both countries’ ride their high population growth and digital economy boom to exponentially grow their economies.
“India’s GDP, which is currently about half of Japan’s, is expected to move ahead of Japan in 2029 and reach 1.4 times in 2035,” stated the JCER report.
Japan’s economy is primed to stall in 2020 as it continues its sluggish growth at the end of the year, according to the International Monetary Fund (IMF).
The IMF cut Japan’s growth forecast once again this year from 0.9 percent to 0.8 percent.
The third largest economy in the world started to lose steam in the third quarter with 0.2 percent GDP growth rate, according to Japanese government data.
Additionally, a trade war with South Korea has most Koreans boycotting all Japanese goods and services. Economic, political and cultural relations between the two Asian economic giants have reached a historical low.
South Koreans have boycotted all things “Made in Japan” since Japan slapped export restrictions on key materials needed in South Korea’s tech manufacturing supply chain — a move economists characterized as “weaponizing trade.”
The IMF advised Japan to de-escalate current trade tensions as to minimize the negative effects onto the Japanese economy that further disrupt global value chains.
“Ongoing global trade tensions and any further escalation could reduce Japan’s net exports, investment, and growth—including from direct and indirect effects via global value chains and adverse spillovers to Japan’s financial sector,” advised the IMF.
The rise of global protectionism is undermining the global economic status quo and is causing contraction in world markets.
The Organisation for Economic Co-operation and Development (OECD) stated that the ramifications of the US-China trade war has caused global economic growth to erode to Great Finacial Crisis levels ten years ago.
The report revised its 2019 GDP growth forecast to 2.9 percent and three percent for next year. The 2020-2021 projection of expansion is one of the weakest since the Great Financial Crisis in 2009.