Economy - overview Government-industry cooperation, a strong work ethic, mastery of hightechnology, and a comparatively small defense allocation (roughly 1% of GDP)have helped Japan advance with extraordinary rapidity to the rank of secondmost powerful economy in the world. One notable characteristic of the economyis the working together of manufacturers, suppliers, and distributors in closelyknit groups called keiretsu. A second basic feature has been the guaranteeof lifetime employment for a substantial portion of the urban labor force;this guarantee is slowly eroding. Industry, the most important sector of theeconomy, is heavily dependent on imported raw materials and fuels. The muchsmaller agricultural sector is highly subsidized and protected, with cropyields among the highest in the world. Usually self-sufficient in rice, Japanmust import about 50% of its requirements of other grain and fodder crops.Japan maintains one of the world's largest fishing fleets and accounts fornearly 15% of the global catch. For three decades overall real economic growthhad been spectacular: a 10% average in the 1960s, a 5% average in the 1970s,and a 4% average in the 1980s. Growth slowed considerably in 1992-95 largelybecause of the aftereffects of overinvestment during the late 1980s and contractionarydomestic policies intended to wring speculative excesses from the stock andreal estate markets. Growth picked up in 1996, largely a reflection of stimulativefiscal and monetary policies as well as low rates of inflation and socialdisorder. As a result of the expansionary fiscal policies and declining taxrevenues due to the recession, Japan currently has one of the largest budgetdeficits as a percent of GDP among the industrialized countries. The crowdingof habitable land area and the aging of the population are two other majorlong-run problems.

GDP purchasing power parity - $2.85 trillion (1996 est.)

GDP - real growth rate 3.6% (1996)

GDP - per capita purchasing power parity - $22,700 (1996 est.)

GDP - composition by sector
agriculture: 2%
industry : 41.5%
services: 56.5% (1995)

Inflation rate - consumer price index 0.3% (1996)

Labor force
total: 67.23 million (March 1997)
by occupation: trade and services 50%, manufacturing, mining, and construction 33%,utilities and communication 7%, agriculture, forestry, and fishing 6%, government3% (1994)

Unemployment rate 3.4% (1996)

Budget
revenues: $528 billion
expenditures: $673 billion, including capital expenditures (public works only) ofabout $75 billion (FY97/98 est.)

Industries among world's largest and technologically advanced producers of steeland nonferrous metallurgy, heavy electrical equipment, construction and mining equipment, motor vehicles and parts, electronic and telecommunication equipment,machine tools, automated production systems, locomotives and railroad rollingstock, ships, chemicals; textiles, processed foods

Industrial production growth rate 2.4% (1996 est.)

Electricity - capacity 199.88 million kW (1994)

Electricity - production 992.5 billion kWh (1995)

Electricity - consumption per capita 6,895 kWh (1995 est.)

Agriculture - products rice, sugar beets, vegetables, fruit; pork, poultry, dairy products,eggs; world's largest fish catch of 10 million metric tons in 1991

Exports
total value: $385 billion (f.o.b., 1996 est.)
commodities : manufactures 96% (including machinery 50%, motor vehicles 19%, consumerelectronics 3%)
partners : Southeast Asia 37%, US 27%, Western Europe 15%, China 5%

Imports
total value: $329 billion (c.i.f., 1996 est.)
commodities: manufactures 54%, foodstuffs and raw materials 28%, fossil fuels 16%
partners: Southeast Asia 24%, US 22%, Western Europe 15%, China 12%

Debt - external $NA

Economic aid
donor: ODA, $14.7 billion (1995 est.)
note: ODA and OOF commitments (1970-94), $174 billion

Currency yen (¥)

Exchange rates yen (¥) per US$1 - 118.02 (January 1997), 108.78 (1996), 94.06 (1995),102.21 (1994), 111.20 (1993), 126.65 (1992)

Fiscal year 1 April - 31 March

NOTE: The information regarding Japan on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Japan Economy 1997 information contained here. All suggestions for corrections of any errors about Japan Economy 1997 should be addressed to the CIA.