'No one thinks of Japan as a superpower anymore,' ADB chief says

Asian Development Bank President Masato Kanda warned that Japan's economic standing has declined and called for fundamental structural reforms, including in the labor market.

Speaking at the Yomiuri International Economic Forum in Tokyo on Wednesday, Kanda said, "No one thinks of Japan as a superpower anymore," according to the Yomiuri Shimbun.

He said Japan's share of total GDP in the Asia-Pacific region had fallen from more than 50 percent in 2000 to around 10 percent in 2025, while China's share had grown to nearly 50 percent and India had risen to a comparable level.

Kanda also noted growing uncertainty in the global economy stemming from instability in the Middle East and the rapid advancement of AI, and said resolving such challenges through international cooperation was essential.

"We need to raise productivity and accelerate industrial metabolism," he said.

On the yen's persistent weakness in foreign exchange markets, Kanda said, "In the medium to long term, exchange rates reflect national strength," adding that improving competitiveness is essential to protect Japan's external purchasing power. "To that end, fundamental structural reforms — including in the labor market — are urgently needed," he said.

Japan's economy forecast to slip to 6th place by 2030

Meanwhile, Japan — once the world's second-largest economy — is projected to fall to sixth place by 2030 in terms of nominal GDP.

Citing IMF projections, the Yomiuri Shimbun reported last October that Japan's nominal GDP in 2030 is forecast at $5.12 trillion, according to Yonhap, which carried the report at the time.

Japan climbed to second place globally in 1968, surpassing West Germany in gross national product during its high-growth era. It held third place behind the United States and China as recently as 2022, before Germany overtook it in 2023, pushing Japan to fourth. IMF estimates suggest India and the United Kingdom will also surpass Japan, leaving it in sixth place by 2030.

According to the projections, the UK's GDP in 2030 is forecast at $5.2 trillion, higher than Japan's.

Predictions that Japan's economy would soon be overtaken by India, a country with a far larger population, have circulated for years — but reports specifying a concrete timeline for the UK surpassing Japan have been rare.

The Yomiuri noted at the time that while the UK's population of about 69 million is roughly half of Japan's, immigration is expected to drive population growth there. It also projected that the UK's real GDP growth rate would outpace Japan's from 2026 onward, at 1.3 to 1.5 percent compared with Japan's 0.5 to 0.6 percent.

yul@heraldcorp.com