Economy

Economy - overview: Government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) have helped Japan advance with extraordinary rapidity to the rank of second most technologically powerful economy in the world after the US and third largest economy in the world after the US and China. One notable characteristic of the economy is the working together of manufacturers, suppliers, and distributors 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 are now eroding. Industry, the most important sector of the economy, is heavily dependent on imported raw materials and fuels. The much smaller 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 50% of its requirements of other grain and fodder crops. 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 1992-95 largely because of the aftereffects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Growth picked up to 3.9% in 1996, largely a reflection of stimulative fiscal and monetary policies as well as low rates of inflation. But in 1997-98 Japan experienced a wrenching recession, centered about financial difficulties in the banking system and real estate markets and exacerbated by rigidities in corporate structures and labor markets. In 1999 output started to stabilize as emergency government spending began to take hold and business confidence gradually improved. The crowding of habitable land area and the aging of the population are two major long-run problems. Robotics constitutes a key long-term economic strength, with Japan possessing 410,000 of the world's 720,000 "working robots".

GDP: purchasing power parity - $2.95 trillion (1999 est.)

GDP - real growth rate: 0.3% (1999 est.)

GDP - per capita: purchasing power parity - $23,400 (1999 est.)

GDP - composition by sector:
agriculture: 2%
industry: 35%
services: 63% (1999 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): -0.8% (1999 est.)

Labor force: 67.76 million (November 1999)

Labor force - by occupation: trade and services 65%, industry 30%, agriculture, forestry, and fishing 5%

Unemployment rate: 4.7% (1999 est.)

Budget:
revenues: $463 billion
expenditures: $809 billion, including capital expenditures (public works only) of about $94 billion (FY00/01 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: -0.1% (1999 est.)

Electricity - production: 995.982 billion kWh (1998)

Electricity - production by source:
fossil fuel: 56.68%
hydro: 8.99%
nuclear: 31.93%
other: 2.4% (1998)

Electricity - consumption: 926.263 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

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

Exports: $413 billion (f.o.b., 1999 est.)

Exports - commodities: motor vehicles, semiconductors, office machinery, chemicals

Exports - partners: US 31%, Taiwan 7%, China 5.5%, South Korea 5.4%, Hong Kong 5.2% (1999)

Imports: $306 billion (c.i.f., 1999 est.)

Imports - commodities: fuels, foodstuffs, chemicals, textiles, office machinery

Imports - partners: US 22%, China 14%, South Korea 5.1%, Australia 4.2%, Taiwan 4.1% (1999)

Debt - external: $NA

Economic aid - donor: ODA, $9.1 billion (1999)

Currency: yen

Exchange rates: yen per US$1 - 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)

Fiscal year: 1 April - 31 March