Japan Economy - 2004

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 third-largest economy 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 the 1990s, averaging just 1.7%, largely because of the after effects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth have met with little success and were further hampered in 2000-2003 by the slowing of the US, European, and Asian economies. Japan's huge government debt, which is approaching 150% of GDP, and the ageing 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." Internal conflict over the proper way to reform the ailing banking system continues.

GDP:
purchasing power parity - $3.567 trillion (2003 est.)

GDP - real growth rate:
2.3% (2003 est.)

GDP - per capita:
purchasing power parity - $28,000 (2003 est.)

GDP - composition by sector:
agriculture: 1.4%
industry: 30.9%
services: 67.7% (2001 est.)

Population below poverty line:
NA%

Household income or consumption by percentage share:
lowest 10%: 4.8%
highest 10%: 21.7% (1993)

Distribution of family income - Gini index:
24.9 (1993)

Inflation rate (consumer prices):
-0.3% (2003 est.)

Labor force:
66.66 million (2003)

Labor force - by occupation:
services 70%, industry 25%, agriculture 5% (2002 est.)

Unemployment rate:
5.3% (2003)

Budget:
revenues: $380 billion
expenditures: $746 billion, including capital expenditures (public works only) of about $71 billion (FY03/04 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:
1.9% (2003 est.)

Electricity - production:
1.037 trillion kWh (2001)

Electricity - production by source:
fossil fuel: 60%
hydro: 8.4%
other: 1.8% (2001)
nuclear: 29.8%

Electricity - consumption:
964.4 billion kWh (2001)

Electricity - exports:
0 kWh (2001)

Electricity - imports:
0 kWh (2001)

Oil - production:
17,330 bbl/day (2001 est.)

Oil - consumption:
5.29 million bbl/day (2001 est.)

Oil - exports:
93,360 bbl/day (2001)

Oil - imports:
5.449 million bbl/day (2001)

Oil - proved reserves:
29.29 million bbl (1 January 2002)

Natural gas - production:
2.519 billion cu m (2001 est.)

Natural gas - consumption:
80.42 billion cu m (2001 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
77.73 billion cu m (2001 est.)

Natural gas - proved reserves:
20.02 billion cu m (1 January 2002)

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

Exports:
$447.1 billion f.o.b. (2003 est.)

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

Exports - partners:
US 28.8%, China 9.6%, South Korea 6.9%, Taiwan 6.3%, Hong Kong 6.1% (2002)

Imports:
$346.6 billion f.o.b. (2003 est.)

Imports - commodities:
machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)

Imports - partners:
China 18.3%, US 17.4%, South Korea 4.6%, Indonesia 4.2%, Australia 4.1% (2002)

Debt - external:
$NA (2002 est.)

Economic aid - donor:
ODA, $7 billion (FY03/04)

Currency:
yen (JPY)

Currency code:
JPY

Exchange rates:
yen per US dollar - 115.93 (2003), 125.39 (2002), 121.53 (2001), 107.77 (2000), 113.91 (1999)