UK Falls Into Recession, Japan Loses Spot as World’s Third-Largest Economy

The United Kingdom and Japan have both officially entered recession after the Gross Domestic Product (GDP) of both countries declined in the last quarter of 2023.

From October to December 2023, UK’s GDP suffered a decline of 0.3 percent while the drop was 0.1 percent in the previous quarter, according to the Office for National Statistics (ONS).

“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery,” ONS director of economic statistics Liz McKeown said in a statement.

UK GDP is estimated to have increased by 0.1 percent in 2023, following growth of 4.3 percent in 2022. This is the weakest annual change in real GDP since the financial crisis in 2009, excluding the year 2020, which was affected by the coronavirus (COVID-19) pandemic, ONS said.

Nominal GDP is estimated to have fallen by 0.2 percent in Quarter 4 2023, attributed to a fall in gross operating surplus for corporations. Compared with the same quarter a year ago, nominal GDP is estimated to have increased by 5 percent.

The UK is however not alone as the European Union narrowly avoided recession in the second half of 2023, with Germany’s output down by 0.3 percent in the last quarter.

Moreover, Japan also unexpectedly slipped into a recession at the end of 2023, losing its title as the world’s third-biggest economy to Germany.

Japan’s GDP fell an annualized 0.4 percent in the last quarter after a 3.3 percent fall in the previous quarter.

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